Partner corporate social responsibility and alliance governance structure: a reputation-based framework and evidence

This study explores how corporate social responsibility (CSR) of a partner in an alliance shapes the governance choice between an equity and non-equity structure. Conceptually, we propose that CSR of a partner contributes to its reputation among stakeholders and the intent to preserve this reputation serves as an external governance over its behaviors within an alliance. This reduces the concerns over exchange hazards within the collaboration and, thereby, the need for equity governance. Empirical evidence consistently supports that a partner’s CSR significantly lowers the likelihood of an equity structure for an alliance. This negative effect is strengthened when the partners have richer past collaboration experience but weakened when they come from industries with greater dissimilarity. It remains stable whether partners differ in nationality. This study extends the knowledge on determinants of alliance governance, strategic benefits of CSR, and alliance-specific contingencies to the reputational implications of CSR.