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The last 15 years have witnessed an unprecedented growth worldwide in the number of interfirm strategic alliances-voluntary arrangements involving durable exchange, sharing, or codevelopment of new products and technologies (Harrigan, 1986; Contractor and Lorange, 1988). There have been numerous efforts to document this growth and identify the environmental factors and firm imperatives whose confluence may have led to this dramatic proliferation of strategic alliances. As a result of this proliferation, most firms are now viewed as placed within a network of interorganizational relationships that are crucial to their success and survival.
Common questions examined in prior research on interfirm strategic alliances have been why alliances occur with such frequency and when firms enter them (e.g., Barley, Freeman, and Hybels, 1992; Powell and Brantley, 1992). The answers have varied. Transaction cost economists have argued that alliances are intermediate hybrid forms between the extremes of markets and hierarchy (Williamson, 1985) that occur when transaction costs associated with a specific exchange are too high for an arm's-length market exchange but not high enough to mandate vertical integration (Hennart, 1988). Other scholars have suggested that many firms enter alliances to learn new skills or acquire tacit knowledge (Kogut, 1988a; Doz, Hamel, and Prahalad, 1989; Hamel, 1991; Khanna, Gulati, and Nohria, 1994). Institutional theorists have suggested a bandwagon effect in which firms succumb to isomorphic pressures and mimic other firms that have entered alliances (Venkatraman, Koh, and Loh, 1994). Yet others have pointed out that alliances may result from firms' quests for legitimacy (Sharfman, Gray, and Yan, 1991; Baum and Oliver, 1991, 1992). Lastly, scholars of corporate strategy have suggested that firms enter alliances to improve their strategic position (Porter and Fuller, 1986; Contractor and Lorange, 1988; Kogut, 1988a).
Although researchers have applied significant efforts in understanding when and why firms enter alliances from each of these perspectives, they have left relatively unexplored the question of with whom firms are likely to ally. Transaction cost economics, for example, assumes exchange relations between two partners as a given and then seeks to explain how those relations will be formalized (cf. Pisano, 1989). This omission of factors that may guide the formation between firms is particularly significant, since "the forces which bring an organization to interact are not the same as those...