Built to last but falling apart: Cohesion, friction and the durability of interfirm alliances

We examine how relationship, network, and market-level sources of cohesion and friction cause firms to persist in or withdraw from alliances that jointly provide assets for service production. Study of alliance withdrawal is needed to complete our models of network dynamics, which thus far have focused primarily on alliance initiation. We investigate withdrawal from open-ended interfirm alliances in the shipping industry, and the findings include greater withdrawal rates as a result of market competition and time-dependent effects of direct and third-party ties. The study of alliance withdrawal is a necessary complement to the vast literature on alliance formation in pursuit of an understanding of network evolution.