The impact of sustainability orientation on firm propensity to ally

Purpose of the paper: The aim of this paper is to analyse the effect of firm sustainability orientation, defined as the overall proactive strategic stance of firms toward the integration of environmental and social concerns and practices into their strategic and operational activities, on its propensity of making alliances. Methodology: We validate our arguments using panel data on 10.509 unique firm-year observations over the period 2003-2017. Findings: We find support for our baseline hypothesis: sustainability orientation has a positive impact on alliance formation. Additionally, we find that the hypothesized relationship is stronger for firms with lower expected value creation and for those that operate in opaque contexts. Research limits: Our work represents an initial attempt to investigate the role of firm sustainability orientation in explaining firm alliance propensity. In so doing, we adopted a firm level perspective assuming alliance counterparts to be homogeneous, which represents the main limitation of this study. Other limitations, as well as topics for future research are discussed in the last section. Practical implications: Our arguments and findings emphasize the critical role played by the way in which the firm manages the network of relationships in which it is embedded, in addition to the considerations about the type of relationship a firm owns that have been widely analysed. In particular, our study contributes to obtain a deeper understanding of the benefits of a stakeholder-oriented approach, which remains fundamental to encourage managers to adopt stakeholder theory practices in their behaviour. Originality of the paper: To the best of our knowledge, this study represents the first attempt to study the relationship between firm sustainability orientation and its alliance propensity.