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Alliances, Major Customer Relationships, FAS 131
In this paper, we examine how inter-firm partnerships impact long-term operating performance. With a global economy, rapid product cycles, capital constraints and advances in technology, firms seldom possess all the capabilities necessary to maintain and grow market share. Consequently, firms rely on a variety of partnerships. Theory suggests that firms enter such relationships to improve performance through access to new products, new markets, or new capabilities. Yet, relatively little is known about the long-term impact of collaborative arrangements such as alliances and established major customer relationships, although such dual partnership arrangements can have a major impact on the firm’s performance success. Our empirical results indicate that inter-firm partnerships affect operating performance, but the impact often depends on the industry, the nature of the firm, and the type of partnership.