Liberty in Law? Intellectual Property Rights and Global Alliance Networks

Sarath Balachandran, Management, The Wharton School, and Exequiel Hernandez, Management, The Wharton School

Abstract: We explore how intellectual property rights (IPR), a type of formal institution, affect firms’ access to global alliance networks and their positioning within those networks. We employed a difference-in-difference design to assess the impact of IPR reforms across thirteen countries. We found that institutional improvements enabled firms from reforming countries to establish more international alliances, particularly if they operated in IP intensive industries, and to increase the geographic diversity of their partners. Access to global alliances became more ‘democratic’ by allowing firms that were of low status pre-reform to attract significantly more foreign partners post-reform. Stronger IPR laws also led the structure of firms’ networks to become significantly more closed (denser). The findings raise several implications for research on institutions, networks, and alliances.

Leave a Reply

Your email address will not be published. Required fields are marked *