Title

The Effects of Alliance Portfolio Characteristics and Absorptive Capacity on Performance: A Study of Biotechnology Firms

Publication Type

Journal Article

Publication Date

9-2001

Abstract

In many high technology industries, strategic alliances have become important for improving a firm's financial performance by providing knowledge that can be used to develop the capabilities needed to introduce new products. Therefore, researchers have examined those characteristics of alliances that can contribute to the performance of high technology companies. There is agreement that the structure and knowledge flows within alliances can affect a firm's innovativeness. However, to date, researchers have studied alliances as individual events or transactions, failing to recognize their synergistic effects as a coherent portfolio. Viewing alliances as a portfolio of strategic agreements, we suggest that portfolio characteristics will be associated with a high technology firm's innovative and financial performance. Also, we suggest that portfolio characteristics will influence absorptive capacity. We test these propositions using a sample of 2456 alliances formed by 143 biopharmaceutical firms. The results indicate that alliance portfolio characteristics and absorptive capacity jointly influence performance. The implications of these findings for high technology firms are discussed.

Keywords

Alliances, Portfolio, Biotechnology, Absortive Capacity

Discipline

Business | Strategic Management Policy | Technology and Innovation

Research Areas

Strategy and Organisation

Publication

Journal of High Technology Management Research

Volume

12

Issue

2

First Page

205

Last Page

226

ISSN

1047-8310

Identifier

10.1016/S1047-8310(01)00037-2

Publisher

Elsevier

Additional URL

http://dx.doi.org/10.1016/S1047-8310(01)00037-2