In the past, alliance portfolio configuration (APC) studies concentrated mostly on the direct alliances or partners of a focal firm. However, a focal firm is also influenced by indirect alliances or partners. This study endeavors to focus on this aspect of APC. It contributes to APC research by extending the scope to three degrees from a focal firm. To assess the effects of extended APCs, 186 3-year window snapshots were created of the extended APCs of 31 Korean bio-pharmaceutical firms. These snapshots range from 2007 to 2014. The effects of structure (density), size (number of alliances and partners), and relationships to firm innovation were measured using the two-step generalized method of moments estimates. The results show that structural sparseness and larger-sized extended APCs are more favorable conditions for innovation, and that structural sparseness and size have a positive relationship to innovation performance.

Our paper contributes to progress on the conceptualization and the operationalization of the alliance portfolio configuration. A variance-based structural equation modeling (partial least squares) has been applied to a sample made up of top global contractors. Previous works on alliance portfolio have analyzed the dimensions of alliance portfolio configuration independently and therefore, the interrelationships between them have not been studied. Results from the data analysis show that the dimensions of alliance portfolio configuration are interrelated in such a way that the relational and the partner alliance portfolio dimensions (a) fully mediate the effect of structural alliance portfolio on the value of the alliance portfolio capital; and (b) this capital exerts significant and positive influences on the growth of the international market share.

In this study, we examine the impact of portfolio configuration on corporate performance in a technological vertical downstream alliance portfolio. First, we explore whether differences in characteristics such as innovativeness, reputation, and bargaining power between a focal firm and its partners affect corporate performance. Second, considering these differences between a focal firm and its partners, we analyze whether an alliance portfolio structure spanning structural holes or a densely embedded network is preferable. We examine 44 leading Korean defense firms over the period 1995–2010 using the two-step generalized method of moments. Our principal arguments emphasize that differences between a focal firm and its partners (in terms of innovativeness, reputation, and bargaining power) affect corporate performance differently. This concept contrasts that of previous studies, which argued that allying with dominant partners is generally better. The arguments also emphasize that the alliance portfolio structure should differ depending on the differences in terms of the three capabilities between a focal firm and its corporate partners.