| In this dissertation I empirically study government supported international research alliances. The dissertation consists of three essays. In the first I examine the determinants of the choice of penetration strategy by Israeli firms that penetrate the American market. The choice is modeled as a two-stage process. First, a firm decides whether to form a new subsidiary, or to form an alliance. Then, firms that choose to form an alliance select a partner. I impute artificial choice sets for Israeli firms and estimate a random utility model of firm choice. I find that more established firms tend to establish their own subsidiaries rather than to form an alliance. When the project is riskier, however, firms prefer to share it. Furthermore, Israeli firms tend to select partners that are located in large technological clusters and prefer firms with at least one Jewish senior executive. I also find positive assortative matching with respect to age, number of employees, and type of ownership. By contrast, I find negative assortative matching with respect to revenue.;In the second essay I investigate the choice of contract type and terms by American and Israeli firms that form research alliances. I use agency theory and property rights theory to guide my investigation. The theories suggest different explanatory variables and different econometric procedures. I find that the econometric procedure implied by the property rights theory fits the data better than the procedure implied by agency theory. Within this econometric framework, however, factors predicted by both theories significantly influence the choice of contractual arrangement.;In the third essay I examine the performance of research alliances. A premise of Israel's R&D support programs has been the principle of neutrality: all eligible projects are funded. With a binding budget constraint the government is forced to depart from neutrality. Optimally governments would support projects that would be under-funded privately. Hence, I develop, and test, hypotheses regarding the determinants of technical success and the timing of commercialization. I find that size and organizational form affect the probability of technical success and duration to commercialization, suggesting a variety of ways to depart from neutrality. |
