Abstract

How do entrepreneurs develop effective strategic alliance? Such alliances contribute to deals with rapid, significant, and low risk capital accumulation (Villette and Vuillermot, 2009). Entrepreneurs establish strategic alliances to speed up opportunity exploitation; gain access to necessary resources without incurring large capital costs, thus sometimes shifting downside risk to allies; and mitigate the risk of demonstrating the value of a new product to potential customers (Shane, 2003). When the strategic alliance processes of effective entrepreneurs operating in stable institutional settings are examined, an additional motivation—conforming allies to the deal strategy leading to capital accumulation—has also been identified (Villette and Vuillermot, 2009). However, we know relatively little about the entrepreneurial strategic alliance process in unstable institutional settings that are an increasingly significant feature of the global economy. In this study, we ask: how do entrepreneurs develop effective strategic alliances under institutional instability?

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