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"The Detail of Drugs: Horizontal Distribution Alliances in the International Pharmaceutical Industry"

Ursula Y. Sullivan and Anne T. Coughlan


First Author :

Ursula Y. Sullivan
Business Administration
University of Illinois at Urbana-Champaign
1206 S. Sixth Street, M/C 706
Champaign, IL 61820

(217) 333-1026
(217) 244-7969 (Fax)

Second Author :

Anne T. Coughlan
Northwestern University
2001 Sheridan Road
Evanston, IL 60208

(847) 491-2719
(847) 491-2498 (Fax)

Abstract :
The primary contribution from this research lies in the uncovering of the factors that predict the formation of horizontal distribution alliances (HDAs) as well as their success. HDAs are characterized by the joining of two firms--from the same industry--to distribute a product owned by one of the firms into a new market. Resource Dependence and Transaction Cost Analysis are the two organization theories integrated with firm-specific strategic concerns to formulate predictions on how these alliances are formed and structured to achieve success. Empirical, dyadic research is conducted in the global pharmaceutical industry. Findings suggest that certain environmental constraints as well as strategic motivations will affect the entrant firmís choice to form an alliance. Results also indicate that a certain level of dependence is required to achieve a successful alliance for both partners; however, too much dependence can negatively affect alliance satisfaction.
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Keywords :
Horizontal distribution alliances, Pharmaceutical industry, Resource Dependence, Transaction Cost Analysis
Manuscript Received : 2004
Manuscript Published : August, 2004
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