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Do Alliance Portfolios Encourage or Impede New Business Practice Adoption? Theory and Evidence from the Private Equity Industry
By Prothit Sen, Phanish Puranam
Strategic Management Journal | November 2022
DOI
onlinelibrary.wiley.com/doi/full/10.1002/smj.3399
Citation
Sen, Prothit., Puranam, Phanish. (2022). Do Alliance Portfolios Encourage or Impede New Business Practice Adoption? Theory and Evidence from the Private Equity Industry Strategic Management Journal onlinelibrary.wiley.com/doi/full/10.1002/smj.3399.
Copyright
Strategic Management Journal, 2022
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Abstract
Research summary: We show that the existing alliance portfolio of a firm can impede the adoption of a new business practice. We analyse the private equity industry which features alliances in the form of deal syndication and has recently seen the rise of a novel investment practice: add-on deals. Using algorithm supported induction, we first document robust empirical patterns using machine learning techniques, and then test the theory we construct to explain these patterns using standard econometric methods in a hold-out sample. We find that when the capabilities required for the new business practice require new partners, existing alliance portfolio members who support current practices can impede access to these new partners (and hence the adoption of the new business practice) through capacity constraints and inter-partner rivalry.
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Prothit Sen

Prothit Sen is an Assistant Professor of Strategy at the Indian School of Business, Hyderabad. Professor Sen’s research focuses on corporate strategy, corporate governance, and organization design with AI-Human collaboration. Professor Sen’s research has been published in top-tier peer reviewed management journals like the Strategic Management Journal, Academy of Management Annals, and featured in premier business outlets such as Forbes, and practitioner journals such as California Management Review.

Professor Sen obtained his PHD from INSEAD, Singapore. Prior to his PHD, Professor Sen worked as a consultant for Bain & Company, India. His consultancy experience spanned across the manufacturing, automotive, IT services, and private equity sectors. Professor Sen holds an MBA from the London Business School and a B.Sc. (Hons.) in Physics from St. Stephen’s College, Delhi.

Prothit Sen