NUMBER OF R&D ALLIANCES AND INNOVATION OUTPUT — NONLINEAR RELATIONSHIP EVIDENCE FROM THE PHARMACEUTICAL INDUSTRY

Shichun Xu, Erin Cavusgil () and Seyda Deligonul ()
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Shichun Xu: School of Management, University of Michigan-Flint, Flint, MI 48502, USA
Erin Cavusgil: School of Management, University of Michigan-Flint, Flint, MI 48502, USA
Seyda Deligonul: Department of Management, St. John Fisher College, Rochester, NY 14618, USA

International Journal of Innovation Management (ijim), 2016, vol. 20, issue 06, 1-22

Abstract: What is the precise nature of the relationship between a firm’s research and development alliance portfolio size and its innovation output? The existing literature is inconclusive between a positive linear relationship and a nonlinear variant. To address the issue, this study explores the relationship between alliance portfolio size and innovation output in the context of the pharmaceutical industry. Contrary to previous investigations, our results suggest increasing returns at a diminishing rate at a low to moderate alliance portfolio level while exhibiting increasingly higher returns at a moderate to high level of portfolio size. An advantage of the present investigation is that we draw from a larger data set of alliance agreements compared to earlier investigations. Additionally, the results provide improved reliability compared to previous studies where violations of some underlying assumptions have been overlooked. The paper concludes with a discussion of findings and suggestions for future research.

Keywords: R&D alliances; combinative capability; innovation; and incremental return (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1142/S1363919616500602

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