Building on organizational learning theory, this study examines whether firms learn to manage alliance portfolio diversity. We argue that alliance portfolio diversity may be advantageous as well as disadvantageous for alliance portfolio performance. Subsequently, we theorize that the diversity-performance relationship is moderated by the firm's alliance experience and capability. Bridging the previously separated literature of diversity and learning, our findings show a curvilinear relationship between diversity and performance. More important, using survey data, we reveal some key processes through which firms learn to manage alliance portfolio diversity.

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This paper assesses the impact on firm innovation of combining alliance-specific and partner-specific attributes within a firm's alliance portfolio. In a panel data analysis of the innovation performance of 119 firms operating in the pharmaceutical industry during 1985-2007, we test whether firm's alliance portfolio displays complementarities across four dimensions. The results suggest that specific combinations of attributes may diminish innovation by decreasing the efficiency of diversity management or by generating redundancies. On the other hand, other alliance portfolio practices are mutually reinforcing and thus foster innovation.

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