Publication Type
PhD Dissertation
Version
publishedVersion
Publication Date
6-2025
Abstract
In response to declining R&D productivity and successive patent cliffs, pharmaceutical companies are increasingly acquiring biotechnology firms to sustain innovation. These acquisitions often occur under conditions of competence-destroying change, where the acquirer's chemistry-based knowledge base does not overlap with the biotechnology expertise of the target, challenging traditional theories that emphasize absorptive capacity and knowledge similarity.
This study introduces therapeutic knowledge, defined as the acquirer’s expertise in specific disease areas, as a distinct and critical dimension that interacts with both chemistry-based and biotechnology-based knowledge. Using a dataset of 212 observations across therapeutic areas from 80 acquisitions, the analysis uncovers an inverted U-shaped relationship between therapeutic knowledge strength and post-acquisition innovation outcomes. Acquisitions in therapeutic areas where the acquirer holds moderate knowledge strength produce the highest patent and citation performance. In contrast, acquisitions in weak or strong therapeutic areas yield diminished returns due to, respectively, low absorptive capacity and excessive knowledge redundancy.
Degree Awarded
Business Administration
Discipline
Strategic Management Policy | Technology and Innovation
Supervisor(s)
GOMULYA, David Matius
First Page
1
Last Page
87
Publisher
Singapore Management University
City or Country
Singapore
Citation
SUNG, Joo Tae.
Acquisition strategy for innovation under competence-destroying change: Empirical study—Pharmaceutical company's biotechnology company acquisition. (2025). 1-87.
Available at: https://ink.library.smu.edu.sg/etd_coll/787
Copyright Owner and License
Author
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.