Alliance Portfolio Diversity as a Driver of Corporate Environmental Performance: Evidence from Sustainability-Oriented Alliances

Abstract This thesis investigates how the composition and diversity of corporate alliance portfolios influence firms’ environmental performance, with a particular focus on the Electrical and Electronic Equipment (EEE) sector. As sustainability has evolved into a central strategic objective for companies worldwide, profitability alone is no longer sufficient to define competitiveness. Firms are now evaluated not only on financial metrics but also on their environmental and social impact, as growing regulatory pressures and stakeholder expectations demand measurable commitments toward sustainable development. Addressing complex challenges such as decarbonization, circular economy, and eco-innovation increasingly requires collaboration rather than isolated corporate action. In this context, managing sustainability-oriented alliance portfolios has become a crucial means of accessing complementary knowledge, technologies, and resources that foster innovation. Previous research has shown that certain types of alliance diversity can improve environmental outcomes, yet empirical evidence remains limited regarding how other forms of heterogeneity relate to sustainability performance. To fill this gap, the study employs a longitudinal panel dataset covering 164 firms and 618 sustainability-oriented alliances between 2002 and 2023. Using regression models, it explores how technological, industrial, functional, geographical, and operational diversity of an alliance portfolio are related to firms’ environmental performance, measured through standardized ESG indicators. The results of functional, technological, and industrial diversity confirm positive association of previous researches. Geographical diversity also has a generally positive relationship, suggesting that international collaborations expose firms to broader environmental standards and best practices that stimulate sustainability adoption. In contrast, excessive operational diversity tends to have neutral or negative effects, as high heterogeneity may increase coordination costs and strategic complexity. Overall, the findings indicate that alliance portfolio diversity is a key enabler of sustainable innovation, but its effectiveness depends on balancing variety and coherence within collaborative networks. While the models are robust, some limitations must be acknowledged. The use of secondary ESG data may introduce measurement bias or reflect greenwashing tendencies, and certain unobservable factors - such as managerial culture or leadership priorities - could influence both sustainability strategies and alliance decisions. Despite these constraints, the research provides a valuable empirical contribution, extending empirical studies on alliance portfolio diversity and offering practical insights for firms seeking to design partnerships that enhance environmental performance.