Too Much of a Good Thing: The Role of Alliance Portfolio Diversity for Innovation Output in the Biotechnology Industry

Wilfried Zidorn and Marcus Wagner

No 12-10, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

Abstract: The purpose of this paper is to show the impact of heterogeneous partners in a biotechnology firm’s alliance portfolio on innovation output. Previous literature has stressed that investments into the heterogeneity of partners in an alliance portfolio is more important than just engaging in multiple collaborative agreements. The analysis of a unique panel dataset of 20 biotechnology firms and their 8502 alliances suggests that engaging in many alliances in general has a positive influence on a firms innovation output. Furthermore, maintaining diverse alliance portfolios has an inverted U-shaped influence on a firm’s innovation output, as managerial costs and complexity levels become too high.

Keywords: Alliances; alliance portfolio; biotechnology; innovation (search for similar items in EconPapers)
Date: 2012
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