Publication Type

Journal Article

Publication Date

6-2017

Abstract

Alliances for new product development have been studied extensively in the operations management literature. Alliances between an innovator and a partner create value by utilizing their complementary capabilities. In this paper, we seek to understand what drives the alliance structure: the choice between collaborative alliances where the parties exert joint efforts and sequential alliances where, for the most part, the partner takes over going forward. Our analysis of a data set of over 2,000 biopharmaceutical alliances reveals our main finding: a key role of operational choices is to address contract theoretic concerns faced by an alliance.We also find that aligning the choice with predictions based on contract theory has consequences for performance. Therefore, our analysis not only has descriptive power about the drivers of alliance choice, but also provides valuable insight into the performance and eventual fate of alliances formed.

Keywords

Signaling, Technology management and process design, Alliances, Biopharmaceuticals, Asymmetric information, Holdup, Contract theory, Private information, Incentives and contracting, Risk aversion, Product development and design

Discipline

Organization Development | Strategic Management Policy | Technology and Innovation

Research Areas

Operations Management

Publication

Manufacturing and Service Operations Management

Volume

19

Issue

3

First Page

453

Last Page

471

ISSN

1523-4614

Identifier

10.1287/msom.2017.0617

Publisher

INFORMS (Institute for Operations Research and Management Sciences)

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://doi.org/10.1287/msom.2017.0617

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