Sponsors and the alliance activity of new technology-based firms

The aim of this paper is to identify empirically the characteristics that lead new technology-based firms (NTBFs) to establish collaborative agreements with other firms and research organizations. Since the seminal work by Teece (1986), the wish of firms to obtain access to complementary assets possessed by other firms that can be combined with their own assets so as to obtain synergistic gains has figured prominently among the motives of alliance formation. This argument is especially pertinent to NTBFs. In fact, these firms are often created with the aim of exploiting commercially an innovative technology; their distinctive technological capabilities relating to an innovative idea make them attractive as alliance partner. In addition, they generally lack the specialized complementary assets that are needed to exploit this idea commercially. Nevertheless, access by NTBFs to specialized complementary assets through alliances may encounter serious obstacles. On the one hand, the search for potential partners by managers of high-tech start-ups is a time consuming activity, with great opportunity costs. These costs are expected to decrease if entrepreneurs can rely on the social network of a 'sponsoring organization'. In this perspective, venture capital (VC)-backed companies and academic start-ups (ASU, that is companies formed by academic personnel and supported by public research institutions) enjoy an advantage with respect to other NTBFs. On the other hand, if the quality of the distinctive capabilities of a NTBF is unknown to potential partners, adverse selection problems similar to those that NTBFs experience in financial markets arise, hindering the establishment of the alliance. Therefore, the ability of NTBFs to credibly signal their quality and the certification effect of endorsement by a sponsoring institution, be it a VC firm, a public research institution, or a public administration providing subsidies to the R&D activity of the NTBF, play a key role in favoring alliance formation.