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When The Weak Are Mighty: A Two‐Sided Matching Approach To Alliance Performance, Darcy Fudge Kamal, Florence Honoré, Cristina Nistor

Business Faculty Articles and Research

Research Summary

Network centrality is an important determinant of alliance performance. However, estimating how each alliance member's centrality affects alliance performance is challenging because the end market might value each partner's contribution differently. We solve this empirical question with a two‐sided matching model that accounts for the partners' endogenous selection and estimates the effect of each side's centrality and input quality on performance. We implement the method in the novel context of the Thoroughbred horse industry, in foal‐sharing alliances between buyers and suppliers. We find that buyer centrality has a larger marginal effect on the alliance performance than the supplier …