A model for analysis of dynamic characteristics of strategic alliance

Based on the standard theory of the firm, a dynamic model for the study of R&D management in a strategic alliance is presented. The model provides insight into the firm's behavior in a strategic alliance with R&D activity. By using this dynamic model, the optimal level of technology for a firm can be determined from the profit maximization viewpoint. The model indicates that firms with complementary skills and resources in a strategic alliance will be better off in terms of R&D cost, profit and competitiveness.