The more tacit the capabilities of a firm in an alliance,the greater the preference for equity involvement.

Question

The more tacit the capabilities of a firm in an alliance,the greater the preference for equity involvement.

Quizplus · Accepted Answer

When a firm's capabilities are tacit, they are not easily transferred or imitated. Thus, to ensure that the knowledge remains within the alliance, equity involvement may be preferred over other forms of involvement, such as licensing or contractual agreements. This allows the firm to have greater involvement and control over the alliance, increasing the likelihood of success.

The More Tacit the Capabilities of a Firm in an Alliance,the