1 In this article we use the specialist knowledge, specialized knowledge, and knowledge specialization of the firm interchangeably. 2 Inter-firm alliances also entail “control” costs, that is, the costs arising from the need to check partners’ opportunism (Koza & Lewin, 1998; White, 2005). While both control and cooperation cost considerations are present in any alliance and influence its governance and evolution (Koza & Lewin, 1998), their relative weight is related in part to the purpose of the alliance. Alliances intent on the combination of the existing knowledge bases of the partners will be less vulnerable to opportunism (Grant & Baden-Fuller, 2004; Grunwald & Kieser, 2007); alliance performance is largely a function of the costs of cooperation. 3 Knowledge transfer is conceptualized (Teece, 1977) as a process whereby technical and managerial staff from the transferring and receiving organizations engage in explaining and understanding know-how and utilizing it in the production process of the receiving organization. Knowledge transfer is thus an overwhelmingly unidirectional flow of information and know-how from the sender to the recipient. Knowledge exchange or sharing is a relatively minor aspect of knowledge transfer.