Explorative versus Exploitative Alliances: Evidence from the Glass Industry in China

How do firms learn from their alliance partners? Do alliance learning outcomes vary among different types of alliances? Are the learning differentials contingent upon contextual factors in an emerging economy? To address these important questions, this study empirically delineates the nature of explorative and exploitative alliances, examines how they affect product and process innovations, and investigates how such effects vary in different contexts. Using a sample of 220 Chinese firms in the glass industry, we use the structural equation modeling procedure to analyze the data. We find that explorative alliances have a stronger impact on both product and process innovations than do exploitative alliances, product, and process innovations are positively related to both market and efficiency performance, and environmental turbulence enhances the impact of product and process innovations. Our findings provide implications for choosing between explorative and exploitative alliances in line with alliance objectives and firms’ resources, and environmental contexts.