The impact of sustainability orientation on firm propensity to ally

  • Stefano Romito
  • Angeloantonio Russo
  • Clodia Vurro
Keywords: sustainability orientation; alliance formation; stakeholder management


Purpose of the paper: The aim of this paper is to analyse the effect of firm sustainability orientation, defined as the overall proactive strategic stance of firms toward the integration of environmental and social concerns and practices into their strategic and operational activities, on its propensity of making alliances.

Methodology: We validate our arguments using panel data on 10.509 unique firm-year observations over the period 2003-2017.

Findings: We find support for our baseline hypothesis: sustainability orientation has a positive impact on alliance formation. Additionally, we find that the hypothesized relationship is stronger for firms with lower expected value creation and for those that operate in opaque contexts.

Research limits: Our work represents an initial attempt to investigate the role of firm sustainability orientation in explaining firm alliance propensity. In so doing, we adopted a firm level perspective assuming alliance counterparts to be homogeneous, which represents the main limitation of this study. Other limitations, as well as topics for future research are discussed in the last section.

Practical implications: Our arguments and findings emphasize the critical role played by the way in which the firm manages the network of relationships in which it is embedded, in addition to the considerations about the type of relationship a firm owns that have been widely analysed. In particular, our study contributes to obtain a deeper understanding of the benefits of a stakeholder-oriented approach, which remains fundamental to encourage managers to adopt stakeholder theory practices in their behaviour.

Originality of the paper: To the best of our knowledge, this study represents the first attempt to study the relationship between firm sustainability orientation and its alliance propensity. 


ADAMS R., JEANRENAUD S., BESSANT J., DENYER D., OVERY P. (2016), “Sustainability‐Oriented Innovation: A Systematic Review”, International Journal of Management Reviews, vol. 18, n. 2, pp. 180-205.

AHUJA G. (2000), “Collaboration Networks, Structural Holes and Innovation: A Longitudinal Study”, Administrative Science Quarterly, vol. 45, n. 3, pp. 425-455.

BECKMAN C.M., HAUNSCHILD P.R., PHILLIPS D.J. (2004), “Friends or Strangers? Firm-Specific Uncertainty, Market Uncertainty, and Network Partner Selection”, Organization Science, vol. 15, n. 3, pp. 259-275.

BIZZI L. (2017), “The Strategic Role of Financial Slack on Alliance Formation”, Management Decision, vol. 55, n. 2, pp. 383-399.

BOWERS A., PRATO M. (2018), “The Structural Origins of Unearned Status: How Arbitrary Changes in Categories Affect Status Position and Market Impact”, Administrative Science Quarterly, vol. 63, n. 3, pp. 668-699.

BRACKER K., RAMAYA K. (2011), “Examining the Impact of Research and Development Expenditures on Tobin’s Q”, Academy of Strategic Management Journal, vol. 10, pp. 63.

BRIDOUX F., STOELHORST J.W. (2014), “Microfoundations for Stakeholder Theory: Managing Stakeholders with Heterogeneous Motives”, Strategic Management Journal, vol. 35, n. 1, pp. 107-125.

CARAYANNOPOULOS S., AUSTER E.R. (2010), “External Knowledge Sourcing in Biotechnology through Acquisition Versus Alliance: A Kbv Approach”, Research Policy, vol. 39, n. 2, pp. 254-267.

CAVES R.E. (1998), “Industrial Organization and New Findings on the Turnover and Mobility of Firms”, Journal of Economic Literature, vol. 36, n. 4, pp. 1947-1982.

CHANG X., DASGUPTA S., HILARY G. (2006), “Analyst Coverage and Financing Decisions”, The Journal of Finance, vol. 61, n. 6, pp. 3009-3048.

CHEN Z., KALE P., HOSKISSON R.E. (2018), “Geographic Overlap and Acquisition Pairing”, Strategic Management Journal, vol. 39, n. 2, pp. 329-355.

CHENG B., IOANNOU I., SERAFEIM G. (2014), “Corporate Social Responsibility and Access to Finance”, Strategic Management Journal, vol. 35, n. 1, pp. 1-23.

CHENG C.C. (2020), “Sustainability Orientation, Green Supplier Involvement, and Green Innovation Performance: Evidence from Diversifying Green Entrants”, Journal of Business Ethics, vol. 161, n. 2, pp. 393-414.

CHO S.Y., LEE C., PFEIFFER JR R.J. (2013), “Corporate Social Responsibility Performance and Information Asymmetry”, Journal of Accounting and Public Policy, vol. 32, n. 1, pp. 71-83.

CUI J., JO H., NA H. (2018), “Does Corporate Social Responsibility Affect Information Asymmetry?”, Journal of Business Ethics, vol. 148, n. 3, pp. 549-572.

DACIN M.T., OLIVER C., ROY J.P. (2007), “The Legitimacy of Strategic Alliances: An Institutional Perspective”, Strategic Management Journal, vol. 28, n. 2, pp. 169-187.

DAS T.K., TENG B.-S. (1998), “Between Trust and Control: Developing Confidence in Partner Cooperation in Alliances”, Academy of Management Review, vol. 23, n. 3, pp. 491-512.

DENG X., KANG J.-K., LOW B.S. (2013), “Corporate Social Responsibility and Stakeholder Value Maximization: Evidence from Mergers”, Journal of financial Economics, vol. 110, n. 1, pp. 87-109.

DOROBANTU S., HENISZ W.J., NARTEY L. (2017), “Not All Sparks Light a Fire: Stakeholder and Shareholder Reactions to Critical Events in Contested Markets”, Administrative Science Quarterly, vol. 62, n. 3, pp. 561-597.

DYER J.H. (2000), Collaborative Advantage: Winning through Extended Enterprise Supplier Networks, Oxford University Press.

ECCLES R.G., IOANNOU I., SERAFEIM G. (2014), “The Impact of Corporate Sustainability on Organizational Processes and Performance”, Management Science, vol. 60, n. 11, pp. 2835-2857.

FREEMAN E.R., MARTIN K., PARMAR B. (2007), “Stakeholder Capitalism”, Journal of Business Ethics, vol. 74, n. 4, pp. 303-314.

GARCIA‐CASTRO R., AGUILERA R.V. (2015), “Incremental Value Creation and Appropriation in a World with Multiple Stakeholders”, Strategic Management Journal, vol. 36, n. 1, pp. 137-147.

GARCIA‐CASTRO R., FRANCOEUR C. (2016), “When More Is Not Better: Complementarities, Costs and Contingencies in Stakeholder Management”, Strategic Management Journal, vol. 37, n. 2, pp. 406-424.

GIBBONS R., HENDERSON R. (2012), “Relational Contracts and Organizational Capabilities”, Organization Science, vol. 23, n. 5, pp. 1350-1364.

GULATI R., HIGGINS M.C. (2003), “Which Ties Matter When? The Contingent Effects of Interorganizational Partnerships on Ipo Success”, Strategic Management Journal, vol. 24, n. 2, pp. 127-144.

GULATI R., SINGH H. (1998), “The Architecture of Cooperation: Managing Coordination Costs and Appropriation Concerns in Strategic Alliances”, Administrative Science Quarterly, pp. 781-814.

HITT M.A., AHLSTROM D., DACIN M.T., LEVITAS E., SVOBODINA L. (2004), “The Institutional Effects on Strategic Alliance Partner Selection in Transition Economies: China Vs. Russia”, Organization Science, vol. 15, n. 2, pp. 173-185.

HITT M.A., DACIN M.T., LEVITAS E., ARREGLE J.-L., BORZA A. (2000), “Partner Selection in Emerging and Developed Market Contexts: Resource-Based and Organizational Learning Perspectives”, Academy of Management Journal, vol. 43, n. 3, pp. 449-467.

HOBERG G., PHILLIPS G. (2010), “Product Market Synergies and Competition in Mergers and Acquisitions: A Text-Based Analysis”, The Review of Financial Studies, vol. 23, n. 10, pp. 3773-3811.

HOENIG D., HENKEL J. (2015), “Quality Signals? The Role of Patents, Alliances, and Team Experience in Venture Capital Financing”, Research Policy, vol. 44, n. 5, pp. 1049-1064.

HUSELID M.A., JACKSON S.E., SCHULER R.S. (1997), “Technical and Strategic Human Resources Management Effectiveness as Determinants of Firm Performance”, Academy of Management Journal, vol. 40, n. 1, pp. 171-188.

HUTTON A.P. (2005), “Determinants of Managerial Earnings Guidance Prior to Regulation Fair Disclosure and Bias in Analysts’ Earnings Forecasts”, Contemporary Accounting Research, vol. 22, n. 4, pp. 867-914.

IOANNOU I., LI S.X., SERAFEIM G. (2016), “The Effect of Target Difficulty on Target Completion: The Case of Reducing Carbon Emissions”, The Accounting Review, vol. 91, n. 5, pp. 1467-1492.

JAP S.D. (1999), “Pie-Expansion Efforts: Collaboration Processes in Buyer-Supplier Relationships”, Journal of Marketing Research, vol. 36, n. 4, pp. 461-475.

JIANG W., WANG A.X., ZHOU K.Z., ZHANG C. (2019), “Stakeholder Relationship Capability and Firm Innovation: A Contingent Analysis”, Journal of Business Ethics, pp. 1-15.

JONES T.M., HARRISON J.S., FELPS W. (2018), “How Applying Instrumental Stakeholder Theory Can Provide Sustainable Competitive Advantage”, Academy of Management Review, vol. 43, n. 3, pp. 371-391.

KALE P., SINGH H. (2007), “Building Firm Capabilities through Learning: The Role of the Alliance Learning Process in Alliance Capability and Firm-Level Success”, Strategic Management Journal, vol. 28, n. 1, pp. 981-1000.

KIM C., BETTIS R.A. (2014), “Cash Is Surprisingly Valuable as a Strategic Asset”, Strategic Management Journal, vol. 35, n. 13, pp. 2053-2063.

KING B.G. (2008), “A Political Mediation Model of Corporate Response to Social Movement Activism”, Administrative Science Quarterly, vol. 53, n. 3, pp. 395-421.

KOGUT B., ZANDER U. (1992), “Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology”, Organization Science, vol. 3, n. 3, pp. 383-397.

KRAMMER S.M. (2016), “The Role of Diversification Profiles and Dyadic Characteristics in the Formation of Technological Alliances: Differences between Exploitation and Exploration in a Low-Tech Industry”, Research Policy, vol. 45, n. 2, pp. 517-532.

LANG M.H., LUNDHOLM R.J. (1996), “Corporate Disclosure Policy and Analyst Behavior”, Accounting Review, vol. 71, n. 4, pp. 467-492.

LAVIE D., ROSENKOPF L. (2006), “Balancing Exploration and Exploitation in Alliance Formation”, Academy of Management Journal, vol. 49, n. 4, pp. 797-818.

LIN H., DARNALL N. (2015), “Strategic Alliance Formation and Structural Configuration”, Journal of Business Ethics, vol. 127, n. 3, pp. 549-564.

LORENZONI G., LIPPARINI A. (1999), “The Leveraging of Interfirm Relationships as a Distinctive Organizational Capability: A Longitudinal Study”, Strategic Management Journal, vol. 20, n. 4, pp. 317-338.

LUO Y. (2007), “The Independent and Interactive Roles of Procedural, Distributive, and Interactional Justice in Strategic Alliances”, Academy of Management Journal, vol. 50, n. 3, pp. 644-664.

MOWERY D.C., OXLEY J.E., SILVERMAN B.S. (1998), “Technological Overlap and Interfirm Cooperation: Implications for the Resource-Based View of the Firm”, Research Policy, vol. 27, n. 5, pp. 507-523.

NORHEIM-HANSEN A. (2015), “Are ‘Green Brides’ More Attractive? An Empirical Examination of How Prospective Partners’ Environmental Reputation Affects the Trust-Based Mechanism in Alliance Formation”, Journal of Business Ethics, vol. 132, n. 4, pp. 813-830.

OZMEL U., REUER J.J., GULATI R. (2013), “Signals across Multiple Networks: How Venture Capital and Alliance Networks Affect Interorganizational Collaboration”, Academy of Management Journal, vol. 56, n. 3, pp. 852-866.

PARMAR B.L., FREEMAN R.E., HARRISON J.S., WICKS A.C., PURNELL L., DE COLLE S. (2010), “Stakeholder Theory: The State of the Art”, The Academy of Management Annals, vol. 4, n. 1, pp. 403-445.

POLLOCK T.G., CHEN G., JACKSON E.M., HAMBRICK D.C. (2010), “How Much Prestige Is Enough? Assessing the Value of Multiple Types of High-Status Affiliates for Young Firms”, Journal of Business Venturing, vol. 25, n. 1, pp. 6-23.

POLLOCK T.G., RINDOVA V.P. (2003), “Media Legitimation Effects in the Market for Initial Public Offerings”, Academy of Management Journal, vol. 46, n. 5, pp. 631-642.

ROSENKOPF L., ALMEIDA P. (2003), “Overcoming Local Search through Alliances and Mobility”, Management Science, vol. 49, n. 6, pp. 751-766.

ROTHAERMEL F.T. (2001), “Incumbent’s Advantage through Exploiting Complementary Assets Via Interfirm Cooperation”, Strategic Management Journal, vol. 22, n. 6-7, pp. 687-699.

ROXAS B., COETZER A. (2012), “Institutional Environment, Managerial Attitudes and Environmental Sustainability Orientation of Small Firms”, Journal of Business Ethics, vol. 111, n. 4, pp. 461-476.

RUSSO A., VASTOLA V., VURRO C. (2018), “To Be or Not to Be Sustainable? Solving the Dilemma During the Acquisition Process”, Sinergie Italian Journal of Management, vol. 36, n. 106, pp.127-140.

RUSSO A., VURRO C. (2010), “Cross-Boundary Ambidexterity: Balancing Exploration and Exploitation in the Fuel Cell Industry”, European Management Review, vol. 7, n. 1, pp. 30-45.

RUSSO A., VURRO C. (2019), “Alliance Management Knowledge and Alliance Performance: Unveiling the Moderating Role of the Dedicated Alliance Function”, Industrial and Corporate Change, vol. 28, n. 4, pp. 725-752.

RUSSO A., VURRO C., NAG R. (2019), “To Have or to Be? The Interplay between Knowledge Structure and Market Identity in Knowledge-Based Alliance Formation”, Research Policy, vol. 48, n. 3, pp. 571-583.

STERN I., DUKERICH J.M., ZAJAC E. (2014), “Unmixed Signals: How Reputation and Status Affect Alliance Formation”, Strategic Management Journal, vol. 35, n. 4, pp. 512-531.

STUART T.E. (2000), “Interorganizational Alliances and the Performance of Firms: A Study of Growth and Innovation Rates in a High-Technology Industry”, Strategic Management Journal, vol. 21, n. 8, pp. 791-811.

VILLALONGA B. (2004), “Intangible Resources, Tobin’sq, and Sustainability of Performance Differences”, Journal of Economic Behavior and Organization, vol. 54, n. 2, pp. 205-230.

VILLALONGA B., MCGAHAN A.M. (2005), “The Choice among Acquisitions, Alliances, and Divestitures”, Strategic Management Journal, vol. 26, n. 13, pp. 1183-1208.

VOMBERG A., HOMBURG C., BORNEMANN T. (2015), “Talented People and Strong Brands: The Contribution of Human Capital and Brand Equity to Firm Value”, Strategic Management Journal, vol. 36, n. 13, pp. 2122-2131.

VURRO C., RUSSO A. (2009), “Balancing Exploration and Exploitation across Firm Boundaries: Intra- and Interorganizational Learning in the Fuel Cell Industry”, in Pogutz S., Russo A., Migliavacca P.O., Innovation, Markets and Sustainable Energy: The Challenge of Hydrogen and Fuel Cells, Edward Elgar Publishing, Cheltenham, UK.

WANG Y., RAJAGOPALAN N. (2015), “Alliance Capabilities: Review and Research Agenda”, Journal of Management, vol. 41, n. 1, pp. 236-260.

ZANDER I., ZANDER U. (2005), “The inside Track: On the Important (but Neglected) Role of Customers in the Resource‐Based View of Strategy and Firm Growth”, Journal of Management Studies, vol. 42, n. 8, pp. 1519-1548.

ZOLLO M., REUER J.J. (2010), “Experience Spillovers across Corporate Development Activities”, Organization Science, vol. 21, n. 6, pp. 1195-1212.

ZOLLO M., REUER J.J., SINGH H. (2002), “Interorganizational Routines and Performance in Strategic Alliances”, Organization Science, vol. 13, n. 6, pp. 701-713.