Collaborative ventures—both equity-based partnerships as well as project-based alliances—have dominated the international business scene over the past two decades. In a recent study my co-authors and I investigated the patterns of related and unrelated collaborative venture formation. Using a large database of over 90,000 collaborative ventures formed during the 1985–2001 period, this study clusters collaborative ventures on the basis of the industry group and home country relatedness of the collaborating partners. Self-organizing map technique within neural network methodology is used to accomplish this objective. The clusters obtained from the self-organizing map form the basis for developing taxonomy of collaborative ventures in which the neurons underlying clusters are classified based on the country of origin and industry affiliations of the collaborating partners and the collaborative venture. The distinguishing characteristics of the clusters and the taxonomy help augment our current understanding of the formation of collaborative ventures.
Overall, there are seven distinct clusters of collaborative ventures. These clusters constitutes of code-vectors obtained from the self organizing map approach within neural network technique.
Industry Effects
None of the identified clusters have partnering firms and the collaborative ventures all belonging to distinct industries. At the same time we find that none of the clusters have all firms from the same industry sector. However, in all clusters at least two firms (among the two partners and the collaborative venture) belong to the same industry. On further examination, we observe that in one of the clusters (cluster 6) the two collaborating firms belong to the same industry. In the remaining clusters (1, 2, 3, 4, 5, 7), the collaborative venture is formed in the industry of one of the partners. Cluster 1 comprises of collaborative ventures that are in the services industry. Among the code vectors, two have partner firms belonging to the same industry group (high-technology industry), the remaining code vectors have one of the partnering firms in services the other representing either high-technology projects or discrete manufacturing industry group. In cluster 2, the collaborative ventures belong to projects and services industry group. The collaborative ventures in the services industry are formed either by the partners who are both in services industry or when one of the partnering firm is in services industry and the other is in the projects industry group. The collaborative ventures in the projects industry are similarly formed either when both partners are from projects industry or when one of the partners is from projects industry and the other is from the financial industry group.
Cluster 3 represents collaborative ventures in the services and natural resources industry group. While the collaborative venture in the natural resources industry group is formed when both partners are from natural resources industry group; the collaborative venture in the services industry group is formed either when the two partners are from financials industry group or when one is from financial industry group and the other is from the services industry group. In cluster 4, the collaborative ventures belong to projects, high technology and process manufacturing industry groups. In the collaborative venture in projects industry group, either the two partners are from services industry group or one is from services and the other is from financial industry group. High-technology collaborative ventures comprise of two partners either both from financials industry group or both from services industry group. High-technology collaborative ventures are also formed when one partner is from services and the other is from either financials industry group or high technology industry group. The process manufacturing collaborative ventures in this cluster are formed when one of the collaborating partners is from process manufacturing industry group and the other is from either trade or natural resources industry group.
In cluster 5, the collaborative ventures are formed in high technology or discrete manufacturing industry groups. The collaborative venture in high-technology industry group comprise of one collaborating partner from high technology and the other from either financial or services industry group; collaborative venture in discrete manufacturing is formed when one of the collaborating partners is in discrete manufacturing industry group and the other is in the trade industry group. In cluster 6, the collaborating partners come from the same industry group and form a collaborative venture in the same industry group. The cluster consists of process manufacturing and high-technology industry groups. Finally, in cluster 7 the collaborative ventures in process manufacturing and discrete manufacturing are formed when both the collaborating partners also belong to these industry groups; meanwhile the collaborative venture in services industry group is formed by the collaborating partners in discrete manufacturing and services industry groups. We observe that industry groups—consumer goods (industry category code 2), miscellaneous manufacturing (industry category code 6) and other (industry category code 11)—are not captured in any of the code vectors suggesting that a cogent underlying structure involving these industries could not be established.
Home Country Effects
Similar to the observation in industry effects, none of the clusters have collaborating partners and collaborative venture, all belonging to different home countries. However, unlike in industry effects analysis, clusters 2 and 6 have all code vectors with the collaborating partners and the collaborative ventures belonging to the same industry. In cluster 1, the partners are from North America or Japan and the collaborative venture is formed in North America, Japan or is Supranational. Cluster 2 comprises of partnering firms from Australasia, North Asia and North America forming a collaborative venture in their respective regions. In cluster 3, one code vector has collaborating partners from North America and South America with the resulting collaborative venture being formed in South America. The remaining code vectors comprise of collaborative ventures that are formed in the country of origin of the collaborating partners (i.e. Australasia, North America and North Asia).
In cluster 4, similarly, except for two code vectors in which the collaborating partners from Japan form a collaborative venture in North Asia and in which collaborating partners from Australasia and North America form a collaborative venture in Australasia, other code vectors are characterized by the collaborating partners and the collaborative venture belonging to the same country (Australasia, North America and Japan). In cluster 5, one-code vector represent a collaborative venture formed in Australasia that is formed by collaborating partners in North America and Australasia. The other two collaborative ventures are formed in North America and Japan by collaborating partners in the same countries. In cluster 6, the code vectors are characterized by collaborating partners and the collaborative venture all belonging to the same country (North America, Japan and North Asia). Finally, in cluster 7, firms in Western Europe collaborate with firms in North America, North Asia and South America to form collaborative ventures in North America, Western Europe, North Asia and South America.
Source: Nair, A., Hanvanich, S. and Cavusgil, T. 2007. “An exploration of the patterns underlying related and unrelated collaborative ventures using neural network: Empirical investigation of collaborative venture formation in data spanning 1985-2001,” International Business Review, Vol. 16, Iss. 6, 659-686.