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This paper aims to investigate how alliances and acquisitions matter for the adaptation of firms facing industry convergence. Building on the disruptive innovation perspective, this study theorizes that during industry convergence, as firms' inter-industry alliance (acquisition) experience increases, those that have more intra-industry alliance (acquisition) experience will exhibit higher survival chances than those that do not.

A longitudinal panel data set of 147 firms' alliances, acquisitions and exit data was constructed in the context of convergence between the US telecommunications equipment and computer networking industries from 1989 to 2003. The survival analysis method was used to test hypotheses. Firms' patent and product-market portfolio data reveal a steady rise in the extent of convergence between the two industries within the period of the study.

The results suggest that both hypotheses gain support, having only inter-industry alliance experience negatively affects firm survival and the survival-enhancing impact of combined inter- and intra-industry acquisition experience is weaker than the impact of combined inter- and intra-industry alliance experience.

This paper contributes to the industry convergence literature and disruptive innovation research by furnishing evidence that the combination of inter- and intra-industry alliance (acquisition) experience can be a valuable source of survival-enhancing benefits during industry convergence that has pernicious influences on firms.