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The growth of alliances in the knowledge-based economy

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  • Contractor, F. J.
  • Lorange, P.

Abstract

The prime objective of this article is to identify the environmental and regulatory conditions which have fostered the rapid growth of alliances. By "alliance" we include all cooperative arrangements -- from "relational contracting" to equity joint ventures. Far from a transient fad, or slowing down, as some observers predicted, the rate of alliance formation may even be picking up in an economy based on ideas rather than material objects. An economy of objects emphasizes mass production, internalized ownership, control and vertical integration. An economy based on knowledge favors customization, flexibility, rapid response and dis-internalization or deconstruction of the value chain. This article shows how this trend favors alliances, as different pieces of the value chain under different ownership may increasingly cooperate with each other. The article traces the role of information technology and the underlying regulatory, economic and competitive conditions that are fostering the creation of alliances.

Suggested Citation

  • Contractor, F. J. & Lorange, P., 2002. "The growth of alliances in the knowledge-based economy," International Business Review, Elsevier, vol. 11(4), pages 485-502, August.
    • Handle: RePEc:eee:iburev:v:11:y:2002:i:4:p:485-502
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    References listed on IDEAS

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