How do competitive dynamics between partners impact the alliance strategies? To approach such inquiry, we devised a hypothesized governance model by applying the literature of competitive dynamics and knowledge-based view in the empirical context of technology intensive alliances. Two contrasting hypotheses driven by competitive tension versus cooperative incentives are developed and then tested on a sample of 1,696 Semiconductor alliances during 1985 and 2008. These sampled alliances formed by actual and/or potential competitors are intentionally selected to magnify the hypothesized contrasting governance effects of multi-dimensional distance determinants. We posit that driven by cooperation that the higher cooperative barriers or higher distance, and contrastingly driven by competition, the higher resource similarity or lower distance between alliance partners, the higher propensity of equity-base mode to safeguard their comparative advantages against competitors. We found empirical support of both hypotheses on the direct or contingent governance effects of six distance determinants. In comparison, our research demonstrates that the governance driver of cooperative incentives stronger than competitive tension, as well as weaker governance effects of cultural distance than the distance dimensions of power, coordination, knowledge, and experience. Such contrasting results support our call for more alliance research to analyze the strategic dynamics between competition and cooperation.
