To ally or not to ally: Enterprises' preferences for technology alliance modes in transnational cooperation

Abstract

When entering a foreign market, transnational enterprises often conduct research and development (R&D) activities to develop patent technologies and then produce products to meet the technology standard of the target market. Technology alliance is an efficient way to enhance the enterprise's capability of R&D. We assume that the R&D process is uncertain and then construct four models based on different alliance modes. We further study the impacts of different factors on enterprises' expected profits and then investigate enterprises' preferences for alliance modes. Our study can provide decision support for transnational enterprises going abroad and enterprises in foreign markets on their choices of technology alliance modes.