When do firms tend to opt for equity alliances?

Question

Quizplus · Accepted Answer

Equity alliances are formed when firms seek to create new resources and capabilities together, such as developing new technology or entering new markets. In such cases, it is beneficial for both firms to have a stake in the alliance through equity ownership, as this creates mutual benefit and shared risk. Options A, B, and C are more applicable to contractual alliances or joint ventures where the parties involved have more clarity and control over their specific responsibilities and rewards.

When Do Firms Tend to Opt for Equity Alliances