Contract Structure in Cross-Border R&D Alliances: The Effect of Cultural Distance

An international alliance implies that a firm has to cooperate with a partner with a different cultural background. In this paper, we examine the impact of cultural distance on R&D alliance contracts and more particularly which differences in cultural background of partners are most reliable to explain contract structure. We tested our hypotheses using a sample of 65 international R&D contracts in the US biotechnology sector and House's (2004) three dimensions: social institutional collectivism, uncertainty avoidance and assertiveness. We focus on how these dimensions determine contract clauses and its functions.