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When Institutions Collide: Firms’ Innovation in Alliances Under Institutional Relatedness and Knowledge Ambiguity
Firms’ orientations toward exploration in alliances reflects the characteristics of their knowledge resources. We first hypothesize that institutional relatedness—number and strength of institutional ties—increases the complexity and specificity of firms’ knowledge pool and that this effect is stronger in less developed societies. As complexity and specificity of firms’ knowledge pool increases, firms’ orientation towards exploratory alliances decreases because of difficulties in understanding and application of this knowledge. This study integrates institutional theory and intra-organizational knowledge transfer research by developing a model of institutional relatedness, knowledge ambiguity, and firms’ alliance orientation.