Long Range Planning xxx (2014) 1e14

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Long Range Planning

journal homepage: http://www.elsevier.com/locate/lrp

Entrepreneurial Orientation, Strategic Alliances, and Firm

Performance: Inside the Black Box
Xu Jiang, Yan Yang, Yun-Long Pei, Gang Wang

Prior research suggests that entrepreneurial orientation (EO) confers discretion in manipulating resources to create value, but the
research lacks empirical evidence from interorganizational relationships and especially strategic alliances. The authors establish a
parsimonious model that links alliance-partnering firms' EO to their performance through two knowledge management practices:
knowledge acquisition from partners and knowledge creation within organizational boundaries. To further understand how interpartner
co-opetition conditions entrepreneurial learning processes, the authors also examine the moderating effects of knowledge-leakage risk
on the EOeknowledge management relationships. Data collected from 205 Chinese firms engaged in strategic alliances generally support
the theoretical predictions and associated hypotheses.
© 2014 Elsevier Ltd. All rights reserved.

Introduction

Entrepreneurial orientation (EO), a key initiative for innovation and value creation, is a competitive strategy that includes
entrepreneurial innovativeness, proactiveness, and risk-taking (e.g., Covin and Slevin, 1989; Miller, 1983; Wiklund and
Shepherd, 2003, 2005). The literature has well-documented the performance implications of EO in various contexts and
fields (see Rauch et al. (2009) for a review). Although scholars have paid ample attention to answering whether EO affects firm
performance, we know little about how EO affects performance, especially in interorganizational contexts such as interfirm
strategic alliances.
The extant literature has focused predominantly on entrepreneurship at different levels of the organization (Welter, 2011).
Although strategic alliances also offer entrepreneurial opportunities, few EO studies have considered strategic alliance
contexts, leaving a “black box” in understanding the EO-performance relationship in strategic alliances. Alliances are
inherently complex structures carrying bilateral information and knowledge, and often blending cooperation and compe-
tition among partners (Reuer, 2004). All strategic alliance parties and their dynamic interactions determine entrepreneurial
activities within alliances. Yet the extant literature has failed to answer many important questions about whether and how EO
generates superior performance outcomes in strategic alliances.
Examining underlying mechanisms that transmit EO effects to performance outcomes is crucial for advancing under-
standing of the EO-performance relationship (Li et al., 2009; Wang, 2008). The knowledge-based view (KBV) is deemed an
appropriate perspective to explain the intermediate mechanisms in the EOeperformance relationship (Hoskisson et al.,
2000), but our study is one of the first to echo that suggestion. Specifically, we draw on the KBV and employ two knowl-
edge management practices from previous studies: knowledge acquisition (how extensively the focal firm acquires valuable
knowledge from alliance partners), and knowledge creation (how extensively the focal firm creates new knowledge within its
organizational boundaries) (see Jiang and Li, 2009; Zhang et al., 2010), as mediating mechanisms through which partner
firms' EO impacts their innovative and financial outcomes.
We focus on knowledge management practices as potential mediators based on their critical role in transmitting EO into
real performance outcomes. On the one hand, entrepreneurial firms in alliances must share knowledge with one another to
gain the heterogeneous expertise and experience they need to successfully accomplish innovative and financial objectives
(Grant and Baden-Fuller, 2004; Jiang and Li, 2009; Li et al., 2010). On the other, those firms must combine existing knowledge
to develop new knowledge within their organizational boundary, so as to exploit that expertise or experience for developing
products and creating value (Li et al., 2009; Kodama, 2009; Nonaka and Takeuchi, 1995). Therefore, both knowledge

http://dx.doi.org/10.1016/j.lrp.2014.09.003
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Please cite this article in press as: Jiang, X., et al., Entrepreneurial Orientation, Strategic Alliances, and Firm Performance: Inside
the Black Box, Long Range Planning (2014), http://dx.doi.org/10.1016/j.lrp.2014.09.003
2 X. Jiang et al. / Long Range Planning xxx (2014) 1e14

acquisition and creation may be important mediating mechanisms that transmit EO's positive effects into innovation and
financial outcomes.
Although EO benefits from the movement of interpartner knowledge, the benefits depend on whether partners simul-
taneously maintain cooperative and competitive relationships. Prior alliance research suggests that while firms expect to
maximize the knowledge they acquire from partners, they also risk having partners imitate or appropriate their firm-specific
knowledge and expertise (Oxley and Sampson, 2004). In forming alliances, therefore, firms potentially risk knowledge
leakage or loss, especially when the partners are opportunistic (Li et al., 2008; Norman, 2004). Such risk forces firms engaged
in interpartner coopetition to protect their core knowledge in the mutual learning process, although protecting knowledge
inevitably constrains interpartner knowledge flows. Hence, knowledge-leakage risk greatly conditions entrepreneurial
learning and associated knowledge movement outcomes. We thus posit that knowledge-leakage risk interacts with EO to
affect knowledge acquisition and creation activities (the mediators).
This study contributes to the literature by extending entrepreneurship to the domain of strategic alliances. We investigate
an important yet underexplored topic in the alliance literature: how entrepreneurial strategic orientation impacts innovation
and financial performance in strategic alliances. We also contribute to alliance-context knowledge management research by
exploring EO's impacts on partner firms' performance via knowledge acquisition and creation, the relationship between
knowledge acquisition and knowledge creation, and the risk condition that may shape EOeknowledge management re-
lationships. Our interest moves beyond whether EO impacts partner firms' performance and expands into the mediating and
moderating processes regarding when and how EO affects performance outcomes. We believe that a more detailed investi-
gation into mediating and moderating effects on entrepreneurship in alliance contexts may help alliance managers translate
entrepreneurial strategies into performance outcomes.
Next, we introduce our hypotheses regarding direct, mediating, and moderating effects. We then clarify our research
design and describe our sample. We report on our tests of hypotheses through data collected by interviewing two key in-
formants in each of 205 Chinese firms engaged in alliances. Then we elaborate on the analyses and the results. Finally, we
discuss theoretical and practical implications of our study and offer suggestions for future research.

Theoretical background and hypotheses

Prior research on entrepreneurial orientation

In the past three decades, EO has become a central concept in the entrepreneurship domain (e.g., Covin et al., 2006; Covin
and Slevin, 1991; Lumpkin and Dess, 1996; Miller, 1983; Wiklund and Shepherd, 2003) and is generally rooted in the strategy
literature (Rauch et al., 2009; Richard et al., 2004). Along that research tradition, EO has been viewed as the entrepreneurial
strategy-making process that concerns the “methods, practices, and decision-making styles” and the “intentions and actions of
key players functioning in a dynamic generative process” (Lumpkin and Dess, 1996, 136e137). EO can partly explain managerial
strategic behaviors that allow firms to outpace the competition by being receptive to innovations, tolerant of risk, and highly
proactive toward market opportunities (Matsuno et al., 2002; Wiklund and Shepherd, 2003). Accordingly, entrepreneurial
firms have three characteristics: innovativeness, risk-taking, and proactiveness (Covin and Slevin, 1989; Miller, 1983).
Specifically, innovativeness taps propensities to engage in novelty, experimentation, and R&D activities that may generate
new products or new technological processes (Lumpkin and Dess, 1996). It highlights the spirit of creating new business from
ongoing practices and rejuvenating stagnant companies by introducing breakthrough innovations. Risk-taking refers to pro-
pensities to “venture into the unknown,” “commit a relatively large portion of assets,” or “borrow heavily” (Baird and Thomas,
1985, 231e232). Firms with risk-taking propensity willingly devote necessary resources to opportunities that may be costly
failures (Naman and Slevin, 1993). Proactiveness identifies propensities to anticipate and act on future needs by seeking new
opportunities (Lumpkin and Dess,1996), introducing new products and services before the competition and anticipating future
demands (Rauch et al., 2009). The emphasis on proactive action toward new opportunities cultivates capacities for creating
products and services ahead of competitors and ahead of customers' recognition (Lumpkin and Dess, 1996).

EO and firm performance in the alliance context

Alliance firms that have high EO can identify potentially valuable partnering opportunities, and initiate preemptive actions
in response (Sarkar et al., 2001). Firms that pursue entrepreneurial collaborative strategies position themselves to regularly
and systematically recognize and exploit external alliance opportunities (Marino et al., 2002). Firms that can identify and
exploit entrepreneurial value-creating opportunities together with complementary partners have advantages over those who
cannot or are unwilling to do so (Lado et al., 1997; Sarkar et al., 2001). Based on those arguments, we propose that partner
firms' EO is positively related to their performance in alliances.
With high EO and help from their partners, firms can react to early signals from the collaborative environment by targeting
premium market segments and “skimming” the market ahead of competitors outside the alliance. Their first-mover
advantages also benefit them in partner space and increase their ability to preempt geographic, technology and customer
perceptual spaces (Lieberman and Montgomery, 1998).
Cope (2005) regarded entrepreneurship as an inherently dynamic phenomenon, and introduced a dynamic learning
perspective to explain entrepreneurial activity. This dynamic learning perspective offers considerable possibilities for relating

Please cite this article in press as: Jiang, X., et al., Entrepreneurial Orientation, Strategic Alliances, and Firm Performance: Inside
the Black Box, Long Range Planning (2014), http://dx.doi.org/10.1016/j.lrp.2014.09.003
 X. Jiang et al. / Long Range Planning xxx (2014) 1e14 3

EO to innovative and financial outcomes in alliances. Specifically, for successful innovation, partner firms must simulta-
neously integrate new knowledge into existing knowledge and convert it into complex goods and services (e.g., Kodama,
2009; Zhang et al., 2010). Partner firms with higher EO are more open to new information, more eager to engage in dy-
namic learning processes, and more willing to invest in cooperative R&D and product development, ultimately generating
stronger innovation (Ireland et al., 2003).
In addition, partner firms with higher EO, compared with counterparts with lower EO, have stronger needs for
achievement and are more likely to exploit opportunities (Shane and Venkataraman, 2000). Although current cooperative
networks provide future alliance opportunities (Gulati, 1995), EO provides potentially valuable future collaboration possi-
bilities vital and beneficial to partner firms' long-term joint value creation. Thus, the key argument for EO's positive impact on
partner firms' performance relates to learning advantages and tendencies to take advantage of emerging opportunities
implied by EO, suggesting:
Hypothesis 1: Entrepreneurial orientation of the focal firm will be positively related to its a) innovative, and b) financial
performance.

EO, knowledge acquisition, and performance

EO and knowledge acquisition

Organizational learning perspective suggests that entrepreneurship provides a cultural foundation for organizational learning
(Harrison and Leitch, 2005; Li et al., 2010). As an organization-wide predisposition to act, EO prompts partner firms to gather
information about environments, markets, and technologies, and then translate those information resources into collaborative
actions (Noble et al., 2002). Meanwhile, EO increases long-term motivation to acquire external knowledge. Moreover, firms with
high EO may proactively acquire tacit and valuable knowledge from their alliance partners to fill their knowledge gap (Li et al.,
2010). We therefore believe that firms with higher EO are more likely to acquire knowledge and skills from partners.
The three EO dimensions also facilitate knowledge acquisition, both independently and collectively. Partner firms with
high EO are innovative and risk-taking, which stimulates them to eliminate traditional authoritarian and hierarchical
structures (particularly in large firms) that inhibit collaborative learning (Kuratko et al., 2001; Zahra et al., 1999). The
knowledge accessing theory of strategic alliances (Grant and Baden-Fuller, 2004) suggests that proactive firms seek valuable
knowledge accessing opportunities from their alliance partners, and take preemptive actions to seize perceived learning
opportunities. The combination of proactiveness and high willingness to take risks makes partner firms more prone to take
advantage of emerging entrepreneurial opportunities and engage in joint learning (Wang, 2008), providing necessary con-
ditions for knowledge sharing. Propensity to proactiveness facilitates the acquisition of specialized skills and knowledge
associated with alliance management by helping them “learn as they do” (Sarkar et al., 2001, 703). Those arguments highlight
a significant positive relation between EO and knowledge acquisition.

Knowledge acquisition and firm performance

KBV indicates that accessing, identifying, and acquiring externally held knowledge is critical for improving performance
and creating value (Grant, 1996; Grant and Baden-Fuller, 2004). Generally, acquiring knowledge from others is a key
component of coordinating capability for partner firms determining whether they can exploit such knowledge to invest in
cooperative R&D and product development projects (Jansen et al., 2005), which are important to alliance-driven innovation
activities (Jiang and Li, 2009; Tsai, 2001). Also, the organizational learning perspective posits that partner firms tend to learn
from each other and bring this learning to new situations and encounters, providing necessary knowledge and information
for innovation (Inkpen, 2000, 2005; Nielsen and Nielsen, 2009). In addition to affecting innovation, acquiring knowledge from
partners, as KBV predicts, can reduce production and operation costs, increase resource utilization, and improve customer
service (Huber, 1991; Madhavan and Grover, 1998), which then benefits partner firms' financial performance.

Mediating role of knowledge acquisition

The preceding analysis posits that EO encourages firms to access, learn, and acquire critical information and knowledge
from partners. In turn, the ability to acquire knowledge across organizational boundaries contributes to innovation and
performance. Thus EO is assumed to facilitate knowledge acquisition and also is expected to improve performance outcomes
through its effect on knowledge acquisition. Therefore:
Hypothesis 2: The amount of knowledge the focal firm acquires from partners will mediate the relationship between its
entrepreneurial orientation and a) innovative, and b) financial performance.

EO, knowledge creation, and firm performance

EO and knowledge creation

The organizational learning perspective suggests that EO encourages learning through exploration and experimentation
(Dess et al., 2003; Koza and Lewin, 1998; March, 1991). Partner firms engaged in such learning are more likely to explore new

Please cite this article in press as: Jiang, X., et al., Entrepreneurial Orientation, Strategic Alliances, and Firm Performance: Inside
the Black Box, Long Range Planning (2014), http://dx.doi.org/10.1016/j.lrp.2014.09.003
4 X. Jiang et al. / Long Range Planning xxx (2014) 1e14

entrepreneurial opportunities in unfamiliar areas. A direct outcome of such exploration is the generation of new knowledge
with the objective of improving organizational innovation and performance.
Specific EO characteristics also prompt firms to create new knowledge on the basis of alliance partnerships. EO's inno-
vativeness aspect encourages active learning behaviors such as exchanging ideas and seeking innovative competencies
among partners. Individuals are granted flexibility and freedom to exercise their creativity and champion promising ideas
(Lumpkin and Dess, 1996). They are encouraged to recombine and integrate their mental models to generate new knowledge
(Kang et al., 2007; Kodama, 2009).
Risk-tolerance implies that managers encourage new thinking, tolerate mistakes, and reward novel ideas (Miller and
Friesen, 1983) that contribute to their knowledge exploration (Wiklund and Shepherd, 2003). This risk-taking pro-
pensity prompts partner firms to deliberately vary activities and conditions to create new knowledge via experimental
learning (Miner et al., 2001) or creative learning (Jiang and Li, 2009), associated with behaviors such as research, discovery
and new courses of action (March, 1991). This particular type of learning is likely to generate new knowledge (Jiang and Li,
2009).
Proactiveness implies that firms tend to proactively seek and exploit new opportunities to seize first-mover advantages
(Lumpkin and Dess, 1996). Alliance partnerships can be viewed as a means to help partner firms proactively access new
external knowledge (Grant and Baden-Fuller, 2004), which directly facilitates knowledge creation (Wadhwa and Kotha,
2006).

Knowledge creation and firm performance

KBV suggests that innovation is “the application of knowledge to produce new knowledge” (Drucker, 1993, 173). The need
to embrace knowledge creation is necessary for innovation activities (Siggelkow and Rivkin, 2006; Zhang et al., 2010).
Knowledge creation processes allow partner firms not only to produce stocks of new knowledge but also apply the newly
created knowledge to produce new products and innovations (Jiang and Li, 2009). Furthermore, new knowledge created
through collaboration helps partner firms augment internal R&D capabilities and improve existing products by adding new
features and functionality (Chang, 2003; Wadhwa and Kotha, 2006), leading to more innovative outputs.
Knowledge creation is critical to performance improvement, competitive advantage and long-term success (Bogner and
Bansal, 2007; Nonaka, 1994). Generally, the generation of new knowledge through collaboration helps partner firms enter
new markets, adopt new processes, or introduce new products earlier than competitors, paving the way to higher financial
performance.

Mediating role of knowledge creation

The preceding analysis suggests that EO positively affects partner firms' performance, and knowledge creation is the
transmitting mechanism. Accordingly, Li et al. (2009) found knowledge creation to mediate the relationship between EO and
performance at the organizational leveldi.e., to radically recombine EO elements, partner firms must combine different
sources of knowledge in creating new knowledge to improve performance. Thus:
Hypothesis 3: The amount of knowledge the focal firm creates within its organizational boundaries will mediate the rela-
tionship between its entrepreneurial orientation and a) innovative, and b) financial performance.

Knowledge acquisition and knowledge creation

With the increasingly knowledge-based focus in strategy research, knowledge and ways to develop and leverage it have
become a critical strategic issue (Nonaka, 1994; Grant, 1996). In strategic alliances, interpartner knowledge sharing is the
process by which an alliance firm makes available knowledge to the alliance, and is an effective way for partner firms to
extend their knowledge bases and develop new knowledge in a relatively cost-effective manner. Therefore, Zhang et al. (2010)
argue that knowledge acquisition facilitates knowledge creation opportunities. In the same vein, we postulate that acquiring
knowledge from alliance partners would be a prerequisite for the creation of new knowledge.
Specifically, creating new knowledge requires reconfiguring a firm's existing knowledge or integrating its existing
knowledge with externally acquired knowledge (de Boer et al., 1999; Kodama, 2009). For an alliance firm, the ability to
acquire and utilize externally held knowledge is related to its absorptive capacity; i.e., the capacity to recognize the value
of new external knowledge, assimilate it, and apply it to commercial ends (Cohen and Levinthal, 1990; Lane et al., 2006;
Lane and Lubatkin, 1998). Through such capacity to recognize and understand potentially valuable external knowledge,
alliance firms access and acquire their partners' knowledge and expertise in a rapid and effective manner (Grant and
Baden-Fuller, 2004; Zhang et al., 2010). When further applied into new encounters, the acquired knowledge is required
to be combined or integrated with the firm's existing knowledge, under which context new knowledge is created
(Kodama, 2009; van den Bosch et al., 1999). The organizational learning perspective also suggests that a significant
advantage of alliance learning is the use of knowledge acquired from partners and applied to new knowledge creation
(Zhang et al., 2010). Therefore:
Hypothesis 4: The amount of knowledge the focal firm acquires from partners will be positively related to the amount of
knowledge the focal firm creates within its organizational boundaries.

Please cite this article in press as: Jiang, X., et al., Entrepreneurial Orientation, Strategic Alliances, and Firm Performance: Inside
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 X. Jiang et al. / Long Range Planning xxx (2014) 1e14 5

Knowledge-leakage risk as a moderator

Although we hypothesize that EO contributes to alliance processes and outcomes, certain conditions may augment or
constrain those effects (Stam and Elfring, 2008; Wang, 2008; Wiklund and Shepherd, 2005). Interpartner coopetition, such as
knowledge-leakage risk, is an important contingency in shaping EO's impact on knowledge management practices in
alliances.
Because knowledge is critically important for providing sustainable competitive advantage, firms must focus centrally
on managing knowledge leakage (Li et al., 2008; Norman, 2004; Oxley and Sampson, 2004). On the one hand, firms are
obliged to share information and knowledge with partners according to the cooperative agreement. On the other hand,
partners may accidentally acquire proprietary information and knowledge beyond the agreement (Anokhin et al., 2011),
or partners may deliberately pursue private learning, unauthorized imitation, and other opportunistic behaviors that
breach both the formal contract and the spirit of the agreement (Das and Kumar, 2011). We define knowledge-leakage risk
as the focal firm's perceived risk of losing its critical information and knowledge to partners beyond the cooperative
agreement.
Under severe appropriation hazards, firms may introduce more protection mechanisms that constrain knowledge flows
among partners (Oxley, 1997; Cassiman et al., 2009). When firms perceive that they greatly risk leakage losses, they may
weaken the partners' chances to appropriate information, but may also impair their ability to capture rents generated from
cooperation (Appleyard, 1996). Therefore, when the focal firm perceives high knowledge-leakage risk, it may change its
intention to manage and control knowledge flow, thus affecting its entrepreneurial learning and knowledge management
activities.

Moderating effect on the EO-knowledge acquisition relationship

Firms expect their exchange partners to reciprocate with useful knowledge or other forms of compensation (Cropanzano
and Mitchell, 2005), but high knowledge-leakage risk implies a strong possibility that partners cannot reciprocate for
knowledge that flows to them. Knowing that the partners will not reciprocate would make the focal firm less willing to
further cooperate (Larsson et al., 1998). Accordingly, the focal firm will more cautiously enact its EO in sharing knowledge
with these partners in daily communication and interaction, even within the scope of the agreement.
In addition, high leakage risk implies that the focal firm may face a dynamic and uncertain collaborative environment
characterized by rapid technological change and high competitive uncertainty. Under that context, entrepreneurial efforts'
positive effects tend to decrease and constrain knowledge inflow. The higher the knowledge-leakage risk, the weaker the
positive effect of EO on knowledge acquisition. Thus:
Hypothesis 5: The focal firm's knowledge-leakage risk will negatively moderate the relationship between its entrepreneurial
orientation and the amount of knowledge acquired from partners.

Moderating effect on the EOeknowledge creation relationship

As argued above, knowledge-leakage risk renders the collaborative environment more turbulent and unpredictable; the
risk exacerbates rapid technological change by hastening obsolescence for existing technologies. In such dynamic collab-
orative niches, partner firms are less likely to have enough knowledge and expertise to maintain competitive advantage
both within and outside the alliance, forcing them to make continuous entrepreneurial efforts to meet changing technology
demands. Simultaneously, knowledge creation activity is one of the most effective means of dealing with unexpected
technological change (Nonaka, 1994; Nonaka and Takeuchi, 1995; Smith et al., 2005). Partner firms with high EO could
expand their internal knowledge creation activities especially to respond to the changing environment caused by the
leakage risk. In addition, knowledge-leakage risk brings interpartner contradictions that are a critical source of new
knowledge creation (Nonaka and Toyama, 2003). Hence, knowledge-leakage risk requires partner firms to enact their EO in
creating new knowledge on one hand, and stimulates contradictions to knowledge creation on the other, underscoring the
importance of knowledge-leakage risk in the entrepreneurial knowledge development process. We propose that EO's
positive effect on knowledge creation becomes more evident when partner firms face higher knowledge-leakage risks.
Thus:
Hypothesis 6: The focal firm's knowledge-leakage risk will positively moderate the relationship between its entrepreneurial
orientation and the amount of knowledge it creates within its organizational boundaries.

Research methodology

Sample and data collection

We examined those relationships using data collected in a survey of 205 Chinese firms engaged in strategic alliances. We
chose China as the research context because, first, China has become a fertile soil for entrepreneurship, a source of

Please cite this article in press as: Jiang, X., et al., Entrepreneurial Orientation, Strategic Alliances, and Firm Performance: Inside
the Black Box, Long Range Planning (2014), http://dx.doi.org/10.1016/j.lrp.2014.09.003
6 X. Jiang et al. / Long Range Planning xxx (2014) 1e14

competitive advantage for Chinese firms. Despite the prominence of entrepreneurship in the Chinese context, however, the
topic is still under-researched (cf., Tang et al., 2008). Second, most Chinese firms face an intrinsic scarcity of knowledge and
technologies, so they must work harder to explore opportunities from the broad external environment and obtain com-
plementary knowledge through such strategies as strategic alliances. Furthermore, although partner firms expect to share
knowledge, they are also forced to protect their core knowledge because of China's under-developed formal institutional
system (Li et al., 2008). However, the extant literature offers little explanation regarding how Chinese firms acquire
knowledge through alliances and how they protect their core knowledge. Therefore, China provides a supportive institutional
and social context for testing those issues.
We based our questionnaire on tested studies and interviews, and in some cases we developed our own measures. First,
we developed the questionnaire in English. Two scholars in this research field translated it into Chinese, and then two other
scholars back-translated it into English to ensure accuracy and compliance (Berry, 1980). Next, we conducted a pilot test of the
Chinese questionnaire to check its interpretability and utility. Twenty top managers from ten local firms that were engaged in
alliances volunteered to review the Chinese version. Their comments prompted us to modify it for clarity and accuracy,
finalizing the questionnaire.
We randomly selected 500 firms from each of three regions in mainland China (including 23 of 31 provinces): the eastern
and coastal region (ten provinces), the middle region (seven provinces), and the western region (six provinces). The sample
frame includes firms from various high-tech and manufacturing industries such as energy, chemicals, machinery, electronics
and IT, among others.
To limit common method bias, we collected data for the variables from two informants in each firm (such as chairman,
CEO, general manager and vice general manager responsible for alliance affairs), carefully chosen for their formal organi-
zational positions and their knowledge about the core issues being studied. Also, we addressed potential social desirability
bias in the responses by offering anonymity and confidentiality, and assuring key informants that no correct or incorrect
answers existed, so as to reduce informant apprehension (Podsakoff et al., 2003).
We collected data from August 2010 to January 2011. Both informants were requested to choose the same partner that had
been an ally for at least one year, and to answer the questionnaire independently. The focus on the alliance being at least a
year old ensured more reasonable and effective research findings regarding alliance processes and outcomes (Jiang and Li,
2008).
Two identical questionnaires were distributed to each firm, for a total of 1500 pairs distributed. After we matched key
informants and deleted missing data, the final sample included 205 partner firms (410 informants). Inter-rater reliability was
checked to find that the two respondents share similar views about key alliance characteristics such as alliance age and
alliance scope.
Based on the assumption that late respondents are more similar to nonrespondents than early respondents are to non-
respondents (Armstrong and Overton, 1977), we assessed potential nonresponse bias by testing for possible differences
between early and late respondents after collecting the data. We compared firm characteristics such as age, size, location and
ownership. A one-way analysis of variance (ANOVA) yielded a statistically insignificant F-value for those key characteristics,
suggesting that nonresponse bias was not a concern.

Variables and measurements

In the Appendix, we provide the measurement items and their validity assessments. The main variables were measured
with multi-items rated on a seven-point scale, from 1 (strongly disagree) to 7 (strongly agree). The first informant (mean
industry experience ¼ 10.12 years; mean firm experience ¼ 7.89 years) gave data on the independent, moderating, and
dependent variables. The second informant (mean industry experience ¼ 9.25 years; mean firm experience ¼ 6.26 years)
provided data on the mediator and control variables.

Independent variable
EO was measured on the basis of Covin and Slevin (1989) and Miller (1983). A nine-item scale was used to assess the focal
firm's innovativeness, proactivity, and risk-taking in preparing for change.

Mediator variables
Knowledge acquisition was operationalized using a five-item scale, following and adapting the measures developed in
prior research on interfirm learning and knowledge sharing in alliances (Jiang and Li, 2009). Similarly, we used five items to
measure knowledge creation.

Moderator variable
At the time of the study, we found no measure in the alliance literature for operationalizing knowledge-leakage risk, so
we developed the scale using a simplified procedure for research instrument development (Song et al., 2006). First, we
referred to Das and Teng (2004) and Norman (2004), and identified a pool of items for knowledge-leakage risk. Second, we
conducted in-depth interviews with five executives who were responsible for their company's alliance activities to build an
understanding of the scale and to develop appropriate measurement items. Third, we selected five researchers with
adequate understanding of knowledge management in strategic alliances to independently verify all issues on how they

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 X. Jiang et al. / Long Range Planning xxx (2014) 1e14 7

could be positioned in the research instrument, which helped us refine several items and generate the first draft of the
instrument. Fourth, we conducted a pilot survey with twenty managers in ten firms, and excluded items with cross-loading
or with value loading less than 0.4 based on theoretical support. Last, by using the formal survey, we conducted psycho-
metric examination of the new measure to testify that the final four items have good reliability and validity. These items
cover the likelihood that the focal firm's knowledge and expertise were transferred to the partner beyond the cooperative
agreement.

Dependent variables
Consistent with Jiang and Li (2009), we used a self-reported questionnaire survey with four items to measure innovative
performance. Following most studies measuring financial performance using an accounting-based measure of profitability,
we adopted five items to measure financial performance change after an alliance was formed.

Control variables
Our analysis controlled for six partner firm-level and alliance-specific variables. Firm age was measured by the logarithm
of the number of years since the focal firm was founded. Firm size was measured by the logarithm of the focal firm's total
number of employees. Partner number was measured by counting the number of partners in the alliance. Alliance form was
constructed as a dummy where 1 indicated that the alliance of concern was an equity joint venture, and 0 that it was a
contractual arrangement. Alliance experience was constructed as a dummy where 1 indicated that the focal firm had past
alliance experience with the partner, and 0 that it had no cooperative experience with the partner. Similarly, competitive
regime was measured as a dummy where 1 indicated that the focal firm and the partner were direct competitors in the same
industry, and 0 otherwise.

Adequacy of the measures: Reliability and validity

Composite reliability was operationalized using Cronbach's alpha, whose values were above the threshold of 0.70 (see the
Appendix) (Cronbach, 1951). The factor loadings of the observed items on the latent constructs were above the recommended
threshold level of 0.70 (Fornell and Larker, 1981), indicating acceptable definitions of the underlying factors. Moreover, the
shared variances were well above the recommended threshold level of 50%, supporting the scales' convergent validity
(Bagozzi and Yi, 1988).
We also tested for discriminant validity of the scales by using a common test (Fornell and Larker, 1981). Table 1 shows that
the diagonal element was greater than each of the off-diagonal elements in the corresponding rows and columns, supporting
the discriminant validity of the constructs.

Results and analyses

Table 1 also presents means, standard deviations, and correlations. No variable was highly skewed, so all variables were
sufficiently close to a normal distribution to justify normality assumptions. We computed the variance inflation factor
(VIF) for all variables. Results suggested no multicollinearity concerns. We then use hierarchical regression to test the
hypotheses because of the mediation model (Baron and Kenny, 1986; James and Brett, 1984). Tables 2 and 3 show
regression results.

EO, knowledge acquisition, and firm performance

The regression result in Model 1 of Table 2 shows that EO has a positive effect on knowledge acquisition (b ¼ 0.180,
p < 0.001). EO also shows a significant positive effect on innovative performance in Model 3 (b ¼ 0.132, p < 0.05). EO's effect on

Table 1
Descriptive statistics, correlations, and discriminant validity

Variable Mean s.d. 1 2 3 4 5 6 7 8 9 10 11

1. EO 5.030 .908 .769
2. Knowledge acquisition 4.763 1.024 .117 .856
3. Knowledge creation 4.815 1.000 .131 .564** .824
4. Knowledge leakage risk 4.867 1.098 .094 .107 .106 .864
5.Innovative performance 5.202 1.066 .152* .469** .292** .134 .850
6. Financial performance 3.759 1.258 .182** .332** .430** .010 .499** .877
7. Firm age 1.131 .403 .052 .022 .016 .027 .008 .042 1
8. Firm size 2.839 2.063 .109 .039 .008 .109 .114 .032 .492** 1
9. Partner number 2.761 3.130 .000 .092 .060 .031 .170* .065 .175* .170 1
10.Alliance form .520 .501 .144* .115 .128 .032 .121 .160* .003 .107 .004 1
11. Alliance experience .493 .502 .021 .145* .118 .048 .141 .216** .019 .125 .181* .035 1
12.Competitive regime .480 .500 .119 .210** .106 .009 .136 .028 .059 .139 .090 .094 .015

Notes: Sample size ¼ 205; s.d. ¼ standard deviation.

*p < 0.05; **p < 0.01.

Please cite this article in press as: Jiang, X., et al., Entrepreneurial Orientation, Strategic Alliances, and Firm Performance: Inside
the Black Box, Long Range Planning (2014), http://dx.doi.org/10.1016/j.lrp.2014.09.003
8 X. Jiang et al. / Long Range Planning xxx (2014) 1e14

innovative performance (0.132) was reduced (0.090) and became nonsignificant in the presence of the mediator, knowledge
acquisition. Model 4a shows that knowledge acquisition had a significant positive effect on innovative performance
(b ¼ 0.479, p < 0.001). Collectively, the results indicate that knowledge acquisition was a full mediator between EO and
innovative performance, supporting Hypothesis 2a. Similarly, Models 7, 8a, and 9a suggest that knowledge acquisition
partially mediated the EOefinancial performance relationship, supporting Hypothesis 2b.
Complementing the causal step approach, we conducted a Sobel (1982) test to determine the significance of EO's
mediating effect on firm performance via knowledge acquisition. Two Sobel tests confirmed knowledge acquisition's
mediation effect for both innovative performance (Sobel test ¼ 2.196, p < 0.05) and financial performance (Sobel test ¼ 2.023,
p < 0.05).

EO, knowledge creation, and firm performance

Model 2a in Table 2 shows a significant positive effect of EO on knowledge creation (b ¼ 0.506, p < 0.001). Models 3, 4b,
and 5b suggest a full mediating effect of knowledge creation on the relationship between EO and innovative performance,
supporting Hypothesis 3a. Similarly, Models 7, 8b, and 9b in Table 2 suggest a partial mediating effect of knowledge creation
on the EOefinancial performance relationship, supporting Hypothesis 3b. Again, Sobel tests confirmed the mediating effects
of knowledge creation for innovative performance (Sobel test ¼ 3.801, p < 0.001) and financial performance (Sobel
test ¼ 4.558, p < 0.001).
Though not hypothesized, we also tested the simultaneous mediating effects of knowledge acquisition and knowledge
creation. Results in Model 6 and Model 10 indicate that when put together, their mediating roles exist all the same for
innovative performance (full mediation) and financial performance (partial mediation). These results suggest that knowledge
acquisition and knowledge creation will simultaneously mediate the relationship between EO and a) innovative, and
b) financial performance.

Table 2
Mediation regression models

Variables Knowledge acquisition Knowledge creation Innovative performance

Model 1 Model 2a Model 2b Model 3 Model 4a Model 4b Model 5a Model 5b Model 6

Controls
Firm age .009 .113 .005 .010 .012 .022 .005 .019 .032
Firm size .129 .261*** .127* .145 .007 .086 .014 .105 .040
Partner number .186* .202*** .052 .182* .183** .120 .182* .130þ .328***
Alliance form .015 .066 .056 .220** .146* .216 .137* .208** .110þ
Alliance experience .137þ .112 .029 .234*** .255*** .232 .251*** .222*** .260***
Competitive regime .153þ .007 .012 .040 .035 .006 .021 .000 .017
Independent variable
EO .180*** .506*** .132* .090 .102 .078
Mediating variable
Knowledge acquisition .532*** .479*** .473*** .384***
Knowledge creation .338*** .328*** .157*
Results
R Square .123 .378 .329 .156 .376 .243 .383 .252 .445
Adj. R Square .053 .102 .271 .100 .326 .193 .319 .181 .370
F value 1.760þ 1.371þ 5.665*** 2.785** 7.498*** 4.842*** 6.038*** 3.535*** 5.985***

Variables Financial performance

Model 7 Model 8a Model 8b Model 9a Model 9b Model 10

Controls
Firm age .054 .031 .011 .052 .003 .056
Firm size .000 .023 .057 .025 .034 .000
Partner number .131 .071 .075 .077 .084 .144**
Alliance form .178** .172** .170** .145* .148* .128þ
Alliance experience .226*** .209** .200** .206** .199** .212**
Competitive regime .094 .130þ .144* .148þ .150* .150*
Independent variable
EO .224*** .183** .154* .171**
Mediating variable
Knowledge acquisition .324*** .316*** .200**
Knowledge creation .444*** .420*** .324***
Results
R Square .138 .188 .281 .218 .301 .340
Adj. R Square .081 .128 .234 .143 .245 .263
F value 2.414* 3.148** 5.910*** 2.925** 5.347*** 4.372***

þp < .10; *p < .05; **p < .01; ***p < .001

Please cite this article in press as: Jiang, X., et al., Entrepreneurial Orientation, Strategic Alliances, and Firm Performance: Inside
the Black Box, Long Range Planning (2014), http://dx.doi.org/10.1016/j.lrp.2014.09.003
 X. Jiang et al. / Long Range Planning xxx (2014) 1e14 9

Table 3
Moderation hierarchical regression models

Variables Knowledge acquisition Knowledge creation

Model 1a Model 1b Model 1c Model 2a Model 2b Model 2c

Controls
Firm age .022 .009 .008 .041 .113 .112
Firm size .141 .129 .108 .277*** .261*** .254***
Partner number .192* .186* .201* .245*** .202*** .203**
Alliance form .081 .015 .019 .062 .066 .068
Alliance experience .151* .137þ .150* .072 .112 .110
Competitive regime .175* .153þ .157* .124þ .007 .019
Main effects
EO .180*** .206*** .506*** .511***
Knowledge leakage risk .112 .085
Moderating effect
EO  Knowledge leakage risk .210** .042
Results
R Square .100 .123 .177 .157 .378 .383
Change in R Square .023 .054 .221 .005
Adj. R Square .053 .053 .094 .065 .102 .109
F Value 2.147* 1.76þ 2.122* 1.708þ 1.371þ 1.401þ

þp < .10; *p < .05; **p < .01; ***p < .001

Knowledge acquisition and knowledge creation

Model 2b in Table 2 tested the impact of knowledge acquisition on knowledge creation. The regression result shows that
knowledge acquisition has a positive impact on knowledge creation (b ¼ 0.532, p < 0.001), supporting Hypothesis 4.

Moderating role of knowledge-leakage risk

Models 1aec in Table 3 tested the moderating role of knowledge-leakage risk in the EOeknowledge acquisition rela-
tionship. The coefficient of EO multiplied by knowledge-leakage risk (b ¼ -0.210, p < 0.01) and the increased adjusted R square
of Model 1c over Model 1b indicated that knowledge-leakage risk negatively moderates the EOeknowledge acquisition
relationship, supporting Hypothesis 5.
For clarity, we conducted a simple slope test (Aiken and West, 1991) using a method shown in Figure 1. We plotted EO
effects on knowledge acquisition for two levels of knowledge-leakage risk: low (one standard deviation below the mean)
and high (one standard deviation above the mean). As the plot suggests, the EOeknowledge acquisition relationship is
weaker at a high level (b ¼ -0.004) than at a low level of knowledge-leakage risk (b ¼ 0.416), further supporting
Hypothesis 5.
Following the same procedures, Models 2a-c in Table 3 tested the moderating role of knowledge-leakage risk in the
EOeknowledge creation relationship. Regression results showed that the interaction of EO and knowledge-leakage risk had
no significant effect on knowledge creation (b ¼ 0.042, p > 0.1). Thus, Hypothesis 6 was not supported.

4
Knowledge Acquisition

3
Low Knowledge-
Leakage Risk
2
High Knowledge-
Leakage Risk
1

0 1 2 3 4
Entrepreneurial Orientation

Figure 1. The effect of interaction between knowledge-leakage risk and EO on knowledge acquisition

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the Black Box, Long Range Planning (2014), http://dx.doi.org/10.1016/j.lrp.2014.09.003
10 X. Jiang et al. / Long Range Planning xxx (2014) 1e14

Discussion and conclusion

In today's rapidly changing, highly uncertain competitive environment, firms must adopt both entrepreneurial and
collaborative strategies that provide competitive advantages (e.g., Covin and Slevin, 1991; Lumpkin and Dess, 1996; Wiklund
and Shepherd, 2003; Anand and Khanna, 2000; Kale and Singh, 2007). Yet we lack understandings of how firms use strategies
effectively and simultaneously (Sampson, 2007). Most past studies focus on entrepreneurship at the organizational level,
leaving strategic alliances as an under-explored context, or explore the alliance phenomenon without considering entre-
preneurship as a critical factor. We join the two streams of research to provide important contributions to both entrepre-
neurship and strategic alliance literatures.
Our results suggest that EO positively relates to partner firms' innovative and financial performance, as our first two
hypotheses predicted. Those findings extend prior research on the organizational level EOeperformance relationship to the
strategic alliance domain, verifying that EO positively impacts partner firms' performance, and addressing past mixed
findings such as nonsignificant (Smart and Conant, 1994), negative (Hart, 1992), or inverted U-shaped (Tang et al., 2008)
relationships between EO and organizational performance.
Our mediation results support the underlying premise that effective knowledge management practices are key in-
termediate mechanisms through which EO is transmitted to performance outcomes: when firms are highly entrepre-
neurial, they tend to benefit greatly from knowledge acquisition and knowledge creation. Our additional test of the
simultaneous mediating mechanisms also underscores that knowledge management research should examine knowl-
edge acquisition and knowledge creation simultaneously rather than investigating each separately. It suggests that
innovative, proactive, and risk-taking firms have greater propensities within alliances to acquire partners' knowledge,
engage in new R&D opportunities, and update existing products and processes, as compared with counterparts that have
lower EO.
Our results also indicate that knowledge acquisition is a precursor to knowledge creation, which helps to uncover the
relationships between different types of knowledge management practices. Literature on absorptive capacity lends support to
this finding: The capacity of an alliance firm to create new knowledge results from the collective ability of its members to
integrate diverse knowledge both inside and outside the firm (Lane et al., 2006; Lane and Lubatkin, 1998). This view is also
similar to Kodama (2009) who argues that the knowledge integration process generates new insights and opportunities for
the firm to create new knowledge.
Finally, our study underlines knowledge-leakage risk as the contextual variable shaping the relationships between EO
and knowledge management practices. Although a sophisticated conceptualization of knowledge-leakage risk is rare, and
we acknowledge limitations in exploring knowledge-leakage risk as a conditioning variable, the construct deserves
emphasis. Our empirical result showing that knowledge-leakage risk has a negative moderating effect on the EOeknowl-
edge acquisition relationship implies that firms facing low knowledge-leakage risk can use alliance partnerships exhaus-
tively to acquire complementary knowledge and assets in their search for entrepreneurial cooperative opportunities. In
contrast, when firms face high leakage risks, they tend to protect their core knowledge and to rely less on joint knowledge-
sharing activities, which emphasizes the importance of controlling knowledge outflows in entrepreneurial learning
processes.
However, our data failed to support the hypothesis that knowledge-leakage risk moderates the EOeknowledge creation
relationship. This suggests that firms will continue to enact entrepreneurial activity in creating new knowledge without
considering possible leakage risks, mainly because in the current competitive environment, knowledge tends to become
quickly outdated (Darr et al., 1995). Firms must depend on their own capabilities to create new knowledge to develop and
maintain competitive advantage, no matter how high the leakage risk. We conclude that alliance entrepreneurs make
relatively independent decisions about investing in internal knowledge creation activities.

Implications for theory

This study makes several contributions to the literature. First, in accordance with growing theoretical and empirical work
on the importance of entrepreneurship in alliance phenomenon (e.g., Sarkar et al., 2001; Teng, 2007), we extend entrepre-
neurship to the domain of strategic alliances by developing a theoretical framework demonstrating how EO affects alliances.
We not only highlight the importance of blended analyses across the domains of entrepreneurship and strategic alliances, but
also echo voices calling for contextualizing views of entrepreneurship by considering different/new contexts for entrepre-
neurship heterogeneity (Phan et al., 2009; Welter, 2011).
Second, although previous studies have provided rich evidence that EO positively impacts innovation and performance,
our adoption of interpartner knowledge management practices as intermediaries may somewhat advance knowledge lacking
in the EOeperformance link in alliance contexts. We also provide a better understanding of the actual mechanism for
transmitting partner firms' entrepreneurial posture into knowledge management capabilities and, hence, superior innovative
and financial outcomes.
Third, we apply the organizational learning perspective in general and the dynamic learning perspective in particular. Both
have gained currency in many fields but have been given limited attention in entrepreneurship (cf., Cope, 2005; Harrison and

Please cite this article in press as: Jiang, X., et al., Entrepreneurial Orientation, Strategic Alliances, and Firm Performance: Inside
the Black Box, Long Range Planning (2014), http://dx.doi.org/10.1016/j.lrp.2014.09.003
 X. Jiang et al. / Long Range Planning xxx (2014) 1e14 11

Leitch, 2005) and EO research in the domain of strategic alliances. Because of limited knowledge on interactions between
learning and entrepreneurial processes (Deakins, 1999), we underpin the importance of dynamic learning in alliance
entrepreneurial processes. Our results indicate that partner firms must create entrepreneurial and collaborative atmospheres
emphasizing entrepreneurial learning and proactivity toward knowledge flows. Therefore, it is vital to view entrepreneurial
alliance learning as dynamic, contextual, and cumulative.
Finally, we recognize that EO positively affects interpartner knowledge movement, but we advance that understanding by
framing the EOeknowledge management relationship in a more explanatory contingency framework. The moderation of
knowledge-leakage risk emphasizes the importance of interpartner coopetition in entrepreneurial collaboration processes. It
implies that partner firms must choose different knowledge management strategies in distinct collaborative atmospheres.
That is, when partner firms high in EO perceive high leakage risk, they should limit resources for sharing existing knowledge
and for knowledge acquisition. In contrast, they should continue investing in new knowledge creation to maintain sustainable
competitive advantage.

Implications for practice

This study yields conclusions that are potentially important for firm managers and alliance practitioners. Alliance part-
nerships are important for identifying entrepreneurial opportunities and procuring knowledge assets. Alliance firms char-
acterized by higher innovativeness, proactiveness, and risk-taking will make better use of their partners' knowledge and
better develop new knowledge within their boundaries. Those firms are also better positioned to find entrepreneurial op-
portunities and to collaborate in exploiting the opportunities. Therefore, partner firms must encourage and facilitate a more
proactive and aggressive learning process in readiness for alliances and to allow more convenient and efficient interpartner
knowledge movement.
Alliances are effective learning platforms only when firms can exploit acquired knowledge through advances such as new
product development and innovation. Furthermore, to explore entrepreneurial opportunities, partner firms must enact their
entrepreneurial posture and efforts in knowledge creation activities. Without new knowledge gains, entrepreneurial
orientation or external linkage alone will have few effects on value creation.
Furthermore, knowledge-leakage risk is important to firms aiming to benefit from alliances. After entering into alliances,
firms must be wary of their partners' attitudes and intentions regarding knowledge and other valuable resources. Partner
firms facing high knowledge-leakage risk should cautiously manage knowledge flows to facilitate alliance activities, while
simultaneously protecting their knowledge from unauthorized transfer, such as by limiting partners' exposure to core
technologies, know-how, and skills.

Limitations and future research directions

We must address some limitations of this study. First, we gauged EO with an aggregated measure involving three di-
mensions: innovativeness, proactiveness, and risk-taking. Lumpkin and Dess (1996) proposed two additional dimensions,
autonomy and competitive aggressiveness, which may also be relevant in alliances, but we omitted those additional di-
mensions in our EO construct because we lacked the appropriate data. Moreover, scholars have warned that dimensions tend
to covary (Covin and Slevin, 1989), and may have different effects, so future studies can examine how they independently and
collectively affect partner firms' performance.
Second, other knowledge management practices, such as knowledge implementation or knowledge protection, may
mediate the relationship between EO and performance. Future studies should test additional knowledge management
practices as well as more mediator variables, both intra- and interorganizational, between EO and performance to further test
the theoretical predictions for robustness.
Third, although our mediation analysis implies a specific causal order among phenomena, our cross-sectional data
prevented us from making causal inferences regarding chains of effects. Despite that limitation, we found a pattern of
relationships that is consistent with our specific causal understanding, thus initially supporting the mediated effects of
EO on performance in the alliance context. Nevertheless, future research should test the mediation effects more rigor-
ously, for instance by adopting a longitudinal design and/or testing this model using some form of structural equations
analysis.
Finally, we tested the model solely in the Chinese context. We might still ask whether the findings will hold when applied
to firms originating from different countries and cultures. In future studies, we will introduce a cross-cultural dimension and
cross-validate the model in different settings.

Acknowledgement

This paper was supported by the National Natural Science Foundation of China (71272134; 70902067), A Foundation for
the Author of National Excellent Doctoral Dissertation of China (201280), and Fundamental Research Funds for the Central
Universities.

Please cite this article in press as: Jiang, X., et al., Entrepreneurial Orientation, Strategic Alliances, and Firm Performance: Inside
the Black Box, Long Range Planning (2014), http://dx.doi.org/10.1016/j.lrp.2014.09.003
12 X. Jiang et al. / Long Range Planning xxx (2014) 1e14

Appendix. Measurement items and validity assessmenta

Construct/ Standardized
Measurement items Loadings
Entrepreneurial orientation: To what extent would you agree with the following statements? (a ¼ .913; AVE ¼ 59.198%)
(1) In general, our company favors a strong emphasis on R&D, technological leadership, and innovation .736
(2) Our company favors “tried-and-true” procedures, systems, and methods .772
(3) Our company is willing to try new ways of doing things and seeks unusual, novel solutions .796
(4) Our company is among the first in the industry to introduce new products or services .774
(5) Our company is the first to initiate actions to competitors, for which the competitors then respond .736
(6) Under uncertainty, our company always adopts an adventurous and active attitude .759
(7) Our company strongly prefers high-risk projects (with chances of very high return) .796
(8) Because of the nature of the environment, our company always takes bold, wide-ranging strategic actions rather than .805
making minor tactical changes
(9) When confronted with decisions involving uncertainty, our company always adopts a bold posture to maximize the .746
probability of exploiting opportunities
Knowledge acquisition: To what extent would you agree with the following statements as true of your relationship with
the most important alliance partner? (a ¼ .908; AVE ¼ 73.227%)
(1) Our company has learned technical expertise from the partner .829
(2) Our company has learned new product development skills from the partner .856
(3) Our company has learned manufacturing skills from the partner .841
(4) Our company has learned marketing expertise from the partner .902
(5) Our company has learned managerial techniques from the partner .848
Knowledge creation: After the alliance was established, did your company (a ¼ .882; AVE ¼ 67.939%)
(1) come up with new ideas for improvement .786
(2) build new ways to perform the task .849
(3) develop new product-specific technologies .824
(4) develop new manufacturing-specific skills .835
(5) develop new marketing-specific expertise .826
Knowledge-leakage risk: To what extent would you agree with the following statements as true of your relationship with
the partner? (a ¼ .886; AVE ¼ 74.581%)
(1) We had a high possibility of leaking our core knowledge to the partner .814
(2) The partner tended to distort, cheat, or steal our information and knowledge, while pretending to be trustworthy .874
(3) Our core knowledge had sometimes been unconsciously transferred to the partner through daily communication and .882
interaction
(4) Our proprietary knowledge was involuntarily transferred to the partner without our permission .883
Innovative performance: After the alliance was established, to what extent do you agree with the following statements?
(a ¼ .870; AVE ¼ 72.217%)
(1) Our R&D expenditures greatly increased (reverse coded) .882
(2) Our patent counts greatly increased .864
(3) We made more process innovations .816
(4) We issued more new products .836
Financial performance: After the alliance was established, have the following performance indicators greatly increased
within your company? (a ¼ .924; AVE ¼ 76.913%)
(1) revenue growth .840
(2) productivity growth .894
(3) return on investments (ROI) .911
(4) return on assets (ROA) .898
(5) return on sales (ROS) .839
a
Extraction method: principal component analysis; Rotation method: varimax with Kaiser normalization.

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Biographies

Dr. Xu Jiang received his Ph.D. from the Xi’an Jiaotong University. He is currently a professor of management in the School of Management at the Xi’an
Jiaotong University. His research interests include strategic alliances, knowledge management, innovation, and entrepreneurship. Dr. Jiang has published in
Research Policy, Journal of World Business, and Journal of International Marketing, among others. E-Mail: jiangxuxu@163.com

Dr. Yan Yang received her Ph.D. from the Xi’an Jiaotong University. She is currently an assistant professor of management at the Zhejiang Gongshang
University. Her research interests include strategic alliances, innovation, and knowledge management. E-Mail: yy-yangyan@163.com

Dr. Yunlong Pei received his Ph.D. from the Xi’an Jiaotong University. He is currently an assistant professor of management in the School of Management at
the Xi’an Jiaotong University. His research interests include social network, knowledge management, and absorptive capacity. E-Mail: yunlong.pei@gmail.
com

Dr. Gang Wang, reprint author, received his Ph.D. from the Xi’an Jiaotong University. He is currently an assistant professor of management in the Economics
and Management School at the Wuhan University. His research interests include strategic alliances, social network, and innovation. He has published in Asia
Pacific Journal of Management. E-Mail: jiwuyou@foxmail.com

Please cite this article in press as: Jiang, X., et al., Entrepreneurial Orientation, Strategic Alliances, and Firm Performance: Inside
the Black Box, Long Range Planning (2014), http://dx.doi.org/10.1016/j.lrp.2014.09.003