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The Role of Government in the Industry Technology Alliance C

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The Role of Government in the Industry Technology Alliance C

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    作者信息

    作者(张中元

    电话(0108585983713701074163

    电子邮件(zhangzhy-2007@163.com

    作者(伍燕然 性别(男,副教授,博士

    电话号码(010-80995338

    电子邮件(bjfreeking@sina.com

    论文发表

    [1] 伍燕然,韩立岩, 不完全理性、情绪与封闭式基金之谜”[J],《经济研究》,2007.3;第六届中国经济学年会邀请宣读

    2006.12,金融领域!。

    [2] 伍燕然,"资产管理中客户偏好的研究"[J],《经济研究》,2002.8

    [3] 韩立岩,伍燕然, 投资者情绪与IPOs之谜”[J],《管理世界》,2007.3;首届中国管理学年会邀请宣读,2006.12,金

    融领域!。

    [4] 伍燕然,蒋姮,当前顺差、外汇储备和资产泡沫关系的探讨”[J],《国际经济合作》,2007.4 [5] 伍燕然,韩立岩,“Does Sentiment Affect Asset Pricing?”[C]ISTP检索!,《The Sixth International Conference on

    Management》,2007,已录用。

    [6] 伍燕然,韩立岩,“Can Sentiment Affect Asset Pricing?--Evidence from Chinese Security Market”[C],《2007 International

    Symposium on Financial Engineering and Risk Management(FERM2007北大光华),已录用。 [7] 伍燕然,"中国新基金职业排行"[J],《投资与证券》,人大复印报刊资料,2000.7

    [8] 范黎波,张中元,基于网络的企业学习与治理机制”[J],《中国工业经济》,2006.10

     1

    The Role of Government in the Industry Technology Alliance Construction

    ZHANG Zhong-yuan, WU Yan-ran

    Central University of Finance and EconomicsBeijing, 100035

    Abstract: We develop a model of alliance in which the interest groups decide whether to join it or work alone. We show that alliances that bring the endowment transformation may be optimal to the whole industry. This idea can be applied to, for example, the design of industry alliances of technology standards R&D. The alliance induces linkages that can motivate firms to help one another because a firms project can succeed only if

    he and all the firms to whom he is linked make a minimum level of investment in their projects. It implies that transfer in the distribution of endowments can form an alliance successfully even without increase in the aggregate endowment. Thus, a necessary condition for alliances to be optimal is the presence of some coordinating mechanism. So a central planner whose task is to coordinate voluntary transfers plays an important role in the alliance formation. The paper offers a new perspective on firms cooperation: These voluntary

    transfers may be a form of achieving mutual insurance and may be optimal from the whole industrys point of

    view. It also implies the role of government that it can increase welfare by coordinating voluntary transfers. However, the important role of government is limited to some spectrum. If an alliance is construct by the governments promotion when the technology is not a systematic one, a fully linked alliance is strictly worse than an unlinked alliance because a fully linked alliance leads to no investment, whereas an unlinked alliance leads to some investment.

    Keywords: Alliance, Autarky, TD-SCDMA

    1 Introduction

     Over the last twenty years, research on alliances has proliferated (for a review, see Stephen P. Borgatti, [1]Pacey C. Foster, 2003). There appears to be a growing consensus that inter-organizational alliances have [2]significant impacts on firm-level outcomes such as the performance of new firms (Stuart, 2000), organizational [3][4]learning (Anand & Khanna, 2000), and innovation(Powell, Koput & Smith-Doerr, 1996). A variety of

    approaches are used to explain why organizations form alliances and how they choose their partners. One view is that alliances can be used to reduce a firm’s exposure to uncertainty, risk, and opportunism (Starkey, Barnatt & [5]Tempest, 2000). Another view is that alliances are made with larger, higher status firms in order to obtain [6]access to resources and legitimacy (Stuart, 2000). Some studies find that a larger alliance has a higher value

    because the size is an indicator of the likelihood that the alliance will succeed in getting its proposed standard adopted. Recruited organizations will be less likely to join because the recruiter sends a negative signal about the [7]resources it has to offer. A third perspective focuses on what can be learned from alliance partners, the learning [8]perspective argues that inter-firm alliance structures affect learning and innovation (Oliver, 2001), alliances

    provide access to information and knowledge resources that are difficult to obtain by other means and which [9]improve firm performance and innovation (Rosenkopf & Nerkar, 2001).

    The development of high technology is always delayed by unexpected complexitiescommitting so many

    of an industry’s firms to a plan to develop this technology means that they have collectively taken large losses

    and many have seen their careful plans made irrelevant. Intuitively, alliances will reduce the risk of failure more for high-complexity businesses than for low-complexity, because high-complexity firms are more likely to benefit from sharing knowledge and competencies, and alliance-based coordination of activities. But finds very weak support for this hypothesis: high- and low-complexity firms do not reduce probability of failure through either technology-related or non-technology-related alliances, while medium-complexity firms have increased probability of survival (significant only at .10 level) for technology-related alliances, but not for [10]non-technology-related alliances (Kulwant Singh, 1997). So the complexity of technology can not answer all

    the success or failure of an alliance.

    In this literature, we offer a model of interest groups’ decision whether to join an alliance or work alone, [11]The model shares some common features with other papers that model networks such as Kremer(1993), [12]Yaron Leitner(2005), we assume that interest groups are rational actors and that they will make the choice that maximizes their chances for advocacy success. The main contribution in this lecture is to show alliances that bring the endowment transformation may be optimal to the whole industry. This idea can be applied to, for example, the design of industry alliances of technology standards R&D. The alliance induces linkages that can motivate firms to help one another, even in cases in which they could not pre-commit to do so because the project of firm can succeed only if he and all the firms to whom he is linked make a minimum level of i

    investment in their projects..

     2

    The paper, therefore, implies that transfer in the distribution of endowments can form an alliance successfully even without increase in the aggregate endowment. In order to find optimal allocations we solve a planning problem as follows: Once endowments are realized, a central planner (such as the government or one of the agents) proposes a scenario, and each firm can either accept or reject. A scenario takes place only if all firms accept. Thus, a necessary condition for linkages to be optimal is the presence of some coordinating mechanism. So the central planner whose task is to coordinate voluntary transfers plays an important role in the alliance formation.

     The paper is organized as follows: Section 2 presents our model, we show that if we allowed for coordination by a central planer, the threat of alliance failure could induce some agents to voluntarily transfer some of their endowments to agents who are insufficient since the technology shared by the alliance is a systematic one. In this way, agents obtain the benefits of mutual insurance even though they cannot pre-commit to making payments. Section 3 we gave a case study of TD-SCDMA industry alliance in Chinese telecommunication industry and draw some lessons from it. In section 4, we give a brief conclusion.

    2 The Model

    Suppose there is a set of agents who have potential cooperation to form an alliance, and N{1,;,n}

    there are three dates, , the sequence of events is as follows: t0,1,2

    : An alliance is chosen. t0

    : (a) Endowments are realized; (b) Transfers are made; (c) Investments are made. t1

    : Project cash flows are realized. t2

    (Alliance is formed at date 0. At date 1, agent is endowed with dollars and has access to a project that ii

    requires an investment of 1 dollars. Project cash flows are realized at date 2. Each project can either succeed and

    yield dollars or fail and yield nothing. It is assumed that . The project of agent can succeed only 1i

    I{0,1}if he and all the members of the alliance invest 1 dollar in their projects. More formally, let denote i

    the amount that agent invests in his project, then agent has two choice: he joins the alliance and becomes ii

    one of the membership with the investment of 1 dollar, or does not join the alliance without the investment. Let

    p(I) denote the vector of investments, and the probability that the project of agent will II,;,Iii1n

    succeed. Then

    ?IifI1jK{i}?jji) (1) p(I)jKi{}i?i)0otherwise(

    Kwhere is the set of agents to whom agent is linked . The vector fully captures the K,;,Kii1n

    interdependence among agents and is called the alliance.

    (((,;,()TDenote by the vector of realized endowments, and by the net transfer to agent 1ni

    T(T,;,T)x(x,;,x).Choosing a vector of transfers is equivalent to choosing an allocation, i1n1n

    x(Txwhere . A vector of investments is feasible given the allocation if II,;,Iiii1n

    Ix for every . (2) iNii

    U(x,I)xLet denote agent s utility given the allocation and the vector of investments . Then Iii

    U(x,I)xIP(I). (3) iiii

    We also require that form a Nash equilibrium. Formally, II,;,I1n

    ~, U(x,I)U(x,I,I)iiii~for every and for every . (4) iNIxii~~Iwhere denotes the vector in which is replaced with . I(I,I)IiiiinU(x,I)Thus, to find an optimal investment rule , we need to maximize I(x)I(x),;,I(x)?i1ni1

    subject to equations (2) and (4).

     3

    V(x)U(x,I(x))PROPOSITION 1: Let , Then we have: ii

    ifxjKi11{}?ji (5) Ix()?iotherwise0(

    and

    V(x)x(1)I(x) (6) iii

    x1jK{i}I(x)0PROOF: Suppose for every . Assume that , and consider the investment jii

    I(x)rule given by i

    1ifjK{i}?i I(x)?iI(x)ifj~K{i}ji(

    jK{i}Since it satisfies equation (2), we can follow that for every ; since , p(I(x))11ij

    nnI(x)U(x,I(x))U(x,I(x))it follows that satisfies equation (4). In addition . This ??ii11iicontradicts the optimality of . I(x)

    jK{i}I(x)1On the other hand, Suppose that, and assume by contradiction that there exists ii

    x1I(x)0I(x)0such that . Equation (2) implies that , and equation (1) implies that , and thereby jjiobtain a contradiction.

    p(I(x))1I(x)1To prove the second part, note that equation (1) implies that only if , Thus, iip(I(x))I(x)V(x)x(1)I(x), and it follows that . iiiii

    (Definition: An allocation rule is feasible if for every realization , the x(()x((),;,x(()1n

    following equations hold:

    nnx(()( (7) ??ii11ii

    x(()0;iN (8) i

    **(Suppose is an optimal allocation given some realization . One way to implement is as follows: xx

    **I(x)(1) A central planner (or one of the agents) proposes and the optimal vector of investments x

    from Proposition 1.

    (2) Agents 1,;,ncan either accept or reject sequentially after observing the responses of previous

    agents.

    *(3) If all agents accept, the necessary transfers to implement take place. Otherwise, agents remain in xautarky.

    Using Proposition 1, we obtain nnnV(x(())((1)I(x(()) (9) ???iii111iii

    Therefore, maximizing the expected sum of utilities is equivalent to maximizing the expected aggregate nnI(x(())Min{n,[(]}level of investment. An upper bound on is , where [?] indicates the integer ??iii1i1less than or equal to.

    nPROPOSITION 2: If the alliance is formed, the aggregate level of investment is if

    nMin{,(}n, and zero otherwise. ?i1i

    n(1Min{,(}nPROOF: Assume first that . If for every , the allocation rule iN?ii1i

    nx(()(I(x(())nis feasible and satisfies the participation constraint; in addition, , so the ?iii1i

    (1x(()allocation is optimal. Assume now that for some , and consider the allocation rule , where ii

     4

    nMin{,(}n?i1i(Min{,(}. Since and , it Min{,(}nxMin(){,}(((ii?iiii1in

    nnfollows that x(()1. In addition, , so is feasible. Now, PROPOSITION 1 x(()(x(()??iii11ii

    I(x(())1V(x(())x(()1V(()(, , , and . Thus, implies that for every iNiiiii

    n(Min{,}?i1i VxVMin((())((){(,}10iiin

    nand the participation constraint is satisfied. Finally, I(x(())n, so is optimal. x(()?i1i

    nAssume now that Min{,(}n. Suppose is an optimal allocation rule. PROPOSITION x(()?i1i

    1 implies that

    nnI(x(())n orI(x(())0. ??ii11ii

    nI(x(())1Assume, by contradiction, that I(x(())n, that is, for every . iN?ii1i

    x(()(tt(x(()I{0,1}Let , Then, . Since and , 1iiiiiii

    x(()V(x(())x(()1V(x(())(t1V(x(())(, Thus, and , iiiiiiii

    (t1(t1so we have , which implies that . iiii

    I(x(())1t(1x(()1To have , we must have , which implies that . iiii

    nntMin{(1;1}tMin{,(}nTherefore, , Summing over , we obtain iii??ii11iinnMin{,(}nt0But then, since , it follows that . ??ii1i1i

    nnx(()(This is equivalent to , which violates equation (7). Hence, there is no feasible ??ii11ii

    nnI(x(())nI(x(())0allocation in which ; so we must have. ??ii11ii

    To get the intuition behind the condition in Proposition 2, we give an example: Suppose there are two agents, one agent has two dollars, and the other agent has zero. Since each project requires exactly one dollar, the efficient allocation requires that each agent end up with one dollar. Consider without loss of generality the realization in which agent 1 has two dollars and agent 2 has nothing. To achieve the efficient allocation, agent 1 needs to transfer one dollar to agent 2 without getting anything in return. The question is whether agent 1 will be willing to do so.

    Suppose now the technology is a systematic one, so the two agents are linked. Agent 1 can gain from investing only if agent 2 invests as well. If agent 1 keeps the two dollars for himself, he is better off consuming his entire endowment, thereby obtaining a utility of two. If instead he transfers $1 to agent 2, agent 1 can invest

    one dollar, thereby obtaining a utility of . The optimal action for agent 1 depends on the value of . When

    , it is optimal to transfer to agent 2; otherwise, it is not. 2

    That is, when the technology is a systematic one and its profit satisfies , agent 2 is willing to 2

    transfer cash to the other agent; that is, only if the return on his project is at least as much as he could obtain by consuming his entire endowment. More generally, the amount of cash agent may be willing to give to the i

    nmin{(;}min{(;}central planner is ; thus, the total amount available for investment is . If this is i?ii1

    nmore than , all agents can invest. Otherwise, because of linkages, no agent invests.

    So the model offers a new perspective on firms cooperation: These voluntary transfers may be a form of

    achieving mutual insurance and may be optimal from the whole industrys point of view. It also implies the role

    of government that it can increase welfare by coordinating voluntary transfers. However, the important role of government is limited to some spectrum, we must be cautious to generalize this judgment. We can see the signification that illustrated in the above example, suppose the technology is not a systematic one, so the two agents may not be linked since the probability of success of agent 1’s project does not depend on whether agent

    2 invests, agent 1 can invest one dollar, consume the second dollar he has, and obtain a utility of . If 1

    instead agent 1 transfers one dollar to agent 2, agent 1’s utility is only. Therefore, agent 1 is better off not

     5

    transfer to agent 2. Agent 2 then ends up with nothing to invest and with a utility of zero. Especially, an alliance is construct by the governments promotion when the technology is not a systematic one, if there exists an agent

    n(1with and , a fully linked alliance is strictly worse than an unlinked alliance Min{,(}n?ii1i

    because a fully linked alliance leads to no investment, whereas an unlinked alliance leads to some investment.

    3 A Case Study: TD-SCDMA Alliance

    TD-SCDMA standard, brought forward by China, was admit formally by 3GPP and becomes one of the international 3G standard on the eleventh meeting of 3G PP TSG RAN which held in California, U.S.A. in 2001. TD-SCDMA industry alliance comes into existence in Beijing in 2002 in order to quicken up the industrialization course of TD-SCDMA and forming integrated industry chain and multi-enterprise supply circumstance since it becomes the virtual worldwide standard. The establishment of TD-SCDMA industry alliance gradually alters the rough complexion of national enterprises who cannot save the situation by themselves because the international magnates besiege it explicitly or implicitly at the beginning and enterprises are devoid of confidence to the childish 3G standard made in China. The government expects to promote the development of TD-SCDMA technology standard since it is at low tide and involves into establishing the alliance and impresses the transpicuous information that the government supports national TD-SCDMA technology development. The alliance which is held by the government initially can build up the enterprises

    confidence and divide the work and use the resource reasonable.

    However, the memberships are in the same boat or just a formalistic stance will determine the mission and merit of the alliance since its establishment is boosted by the exterior power other than by the enterprise spontaneously. The government concerns whether the alliance began it R&D start-up and the fund input but only to find that the memberships do not invest enough resource till 2003. It is not difficult for a firm to enter an alliance but the expense and resource. So the government decides to invest in TD-SCDMA industry and coordinate the firms cooperation. The memberships accelerate their cooperation after government capital transfusion. TD-SCDMA industry alliance is relatively successful till today, the membership has increased to more than 30 firms from 7 firms initially. The operation businesses within the alliance involve the system product, chips, terminal and testing instruments of the industry chain. We can draw some lessons from the successful segment of TD-SCDMA.

    First, firms’ beliefs and values moderate uncertainty’s influence on alliance formation. Firms perceive and

    respond to uncertainty on many dimensions which based on their source. Firms’ decision to use alliances is

    positively associated with high general uncertainty, high technological volatility and demand, unpredictable customers and competitors, and demands for internationalization and alliance use is negatively associated with [13]firms’ perceptions of its strong potential for growth and profits. (Pat H. Dickson & K. Mark Weaver, 1997).

    Second, periods of “collective crisis” lead to “collective action”. Collectivist orientation can moderate

    relation between entrepreneurial orientation and alliance decision. Some study indeed reveals significant interactions among managers’ collectivist orientations. (Pat H. Dickson & K. Mark Weaver, 1997). The

    autonomy concerns suggest that firms with narrow issue interests will be less likely to ally than those with broad issue interests. So, firms without strong organized opposition will be more likely to ally because the appearance of broad support is more important, those whose positions are opposed by relevant decision makers will be less likely to ally because there is no point in expending resources to build support for an allied effort that will likely lose.

    Third, inter-dependent firms with common third-party ties are more likely to ally than non-interdependent firms with similar ties. Firms that are strategically interdependent are more likely to form alliances than those that are not and firms facing greater competition for members and resources will be less likely to join lest they [14]compromise their unique identity (Ranjay Gulati(1995).Given the critical nature of telecommunication context,

    government is reluctant to ignore national industries’ competitive performance, and firms may be more willing

    to turn to government when they start to struggle. With more comprehensive industry-wide collaboration, Chinese firms’ efforts in TD-SCDMA are initiated by government’s influence. Studies find that interdependent

    firms connected through a given set of ties are more likely to ally than non-interdependent firms with similar connections(Ranjay Gulati, 1995).

    And Last, which infers from second, Firms character will influence the decision: firms with social or public interests will be more likely to join than those with corporate or tangible interests because those who represent expressive interests have to work harder to remain visible and maintain support than those representing more [15]material concerns (Ranjay Gulati & Martin Gargiulo, 1999). Relational embeddedness suggest that cohesive

    ties offer a unique source of information about partners’ capabilities. The central planer involve in the alliance

    both providing information advantages to itself and at the same time making the organization more visible to potential partners; thus its centrality should also positively predict the likelihood of alliance.

     6

    4 Conclusion

    In an alliance, practitioners tend to report struggles with group process, with overcoming the competitive mindset, with generating participation, managing differences among people and firms, and defining an alliance agenda. By contrast, our arguments focus on the central planer set clear goals from the beginning, developed ground rules from those goals, but leaves participants room to plan their own agenda for fulfilling those goals. It allows a fairly broad base of firms to initiate projects and develop trust and group formation. The main point of this paper is that alliances can motivate agents to help one another to promote firms R&D. It can be applied, for

    example, to the design of industry systematic technology alliance when the availability of some coordinating device is possible. Without coordination the results do not hold. This suggests that whether agents should form an alliance may partially depend on whether it is possible to coordinate.

    The existing literature shows that agents will form alliances may not always be the case. Toby E. Stuart [16](1998) uses event-history and negative binomial dyad models to explain the decision to form strategic alliances within the semiconductor industry. He finds that prestige appears to be positively associated with alliance formation, because high-prestige firms can generate publicity and consumer interest from alliances with other high-prestige firms, and can get favorable contract terms from lower-prestige alliances. This results indicate that partner reputation is positively and significantly related to long-term satisfaction with the alliance, [17]though not to initial satisfaction (Todd Saxton, 1997). Economic theory predicts reputation would be

    bargained for in the initial transaction, so that it would not affect expected payoffthis result suggests that it’s

    partially bargained for but benefits that accrue over time may not be initially apparent. The central planer who assumes the initial transaction can personate himself as the broker because he has the capacity to built trust and better knowledge of the partner’s capability. Since a stable alliance that is also efficient does not always exist, the conclusion is that in some cases there may be room for endogenous institutions or rules by regulators that are created in order to help implement efficient alliances.

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