Risk Types and Inter‐firm Alliance Structures*

This paper examines the choice between equity and non‐equity forms of inter‐firm alliances from an ‘integrated risk’ perspective, which combines relational risk and performance risk in inter‐firm alliances. Relational risk relates to co‐operation among alliance partners, while performance risk has to do with the hazards of not achieving the performance objectives of an alliance, given co‐operation. We suggest that equity alliance is adopted to control relational risk, while non‐equity alliance is aimed at minimizing performance risk. Existing studies on the choice of alliance configurations are examined from the proposed risk perspective, and a number of key propositions are advanced for empirical testing and further development of the perspective.