Abstract:

Examining collaborations between two alliances, this research aims to explore how group cohesion, as measured by prior collaborations among members, influences the time it takes for them to reach a mutually acceptable agreement with external organizations. Alliance cohesion triggers two mechanisms that can exert opposing effects on negotiation times. On one hand, it facilitates information dispersion and interpretation within the alliance. It thus expedites group decision-making and shortens negotiation time with outside organizations. On the other hand, cohesion strengthens group solidarity and competitiveness when engaging with external parties, impeding mutual understanding with the other alliance and prolonging negotiation time. Drawing on the resource dependence theory, we argue that the dominant mechanism driving the relationship between alliance cohesion and inter-alliance negotiation time is contingent on the alliance's position of dependence. Facing greater uncertainty, dependent alliances are more cautious and tend to focus more on their internal decision-making. However, the dominant alliances supplying critical resources are primarily concerned with achieving their objectives and leveraging their advantaged position. Thus, cohesion carries different implications for these two alliances. To empirically test our hypotheses, we choose project-finance infrastructure setting that involves two multipartner alliances: sponsors alliance (SPV) and lenders alliance (loan syndicate). We use an original database containing about 901 projects across 65 countries and eight different sectors between 2000 to 2021.