This paper examines the changing process of strategic alliance formation in the Japanese electronics industry between 1985 and 1998. With data on 123-135 Japanese electronics/electrical machinery makers, we use a dyad panel regression methodology to address a series of hypotheses drawn largely from embeddedness theory on how the firms' horizontal and vertical keiretsu business group affiliations and prior alliance networks supported and constrained partner choice in new R&D (innovation) and nonR&D (implementation) domestic economy alliances. We find that in the first half of our series (1985-91; the "preburst" period) keiretsu served as infrastructure or platform for new strategic alliances that had both innovation and implementation goals. In the second half of our series (1992-98, the "postbubble" period) the keiretsu effects on innovation alliance formation were gone, but the groups' role in nonR&D or implementation alliances, the purpose of which was often cost reduction, had expanded. Our results suggest that Japanese electronics firms over this interval of time adapted rationally to the heightened uncertainty and stringency of the Japanese domestic economic environment by searching outside their preexisting networks for innovation alliances while at the same time exploiting those networks for implementation alliances addressed to cost-reduction and other operational aims. The study speaks to embeddedness theory in showing that economic actors are not deterministically constrained by business group or other preexisting network ties but may in rational fashion exploit or abandon those ties with an eye to advancing corporate and alliance goals.3

The analysis of manufacturer-supplier relationships in Japan has contributed significantly to the advancement of interorganizational theory. It has yielded broad evidence that long-term collaborative partnerships enable firms to exploit the incentive benefits of market-based exchange while reaping the learning and coordination benefits of internalization within a corporate hierarchy.In this paper, we go beyond the issues of trust and cooperation that have occupied much prior theory and research on supplier relations in considering another dimension along which collaborative agreements may be arrayed. We build on transaction and network theories respectively to propose tw o types of long -term collaborative ties: dyadic or bilateral governance and network embeddedness.A comparative analysis of collaborative relationships in product and process development between two Japanese TV manufacturing companies and their suppliers provides empirical evidence for the distinctive effect of network ties over dyadic relationships for collaborative knowledge-sharing.2