Do Relation-Specific Investments Pay Off? Comparing NetValue of Cross- & Within-Sector Partnerships

Interorganizational partnerships are of high strategic importance and consequentially, social enterprises are increasingly engaging in partnerships either within or across societal sectors to address complex social issues and maximize the joint value created. We challenge the dominant, albeit untested, assumption in the literature that cross-sector partnerships are more effective in creating joint value than within-sector partnerships. Based on the relational view and an analysis of data from 186 SEs and 137 partners who participate in such collaborations, our results demonstrate that cross-sector partnerships do not perform more effectively than within-sector partnerships because of the additional costs in cross-sector settings. We thus enhance the literature on cross-sector partnerships through a close examination of the actual outcome in terms of the newly established construct of net value.