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Are all ‘sharks’ dangerous? new biotechnology ventures and partner selection in R&D alliances
Author(s) -
Diestre Luis,
Rajagopalan Nandini
Publication year - 2012
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.1978
Subject(s) - incentive , value (mathematics) , appropriation , function (biology) , selection (genetic algorithm) , alliance , business , marketing , sword , value creation , industrial organization , microeconomics , economics , computer science , biology , political science , linguistics , philosophy , machine learning , evolutionary biology , artificial intelligence , law , operating system
We examine how new biotechnology firms (NBFs) select pharmaceutical firms as R&D allies as a function of value creation and value appropriation considerations. We develop a theoretical framework to understand partnering decisions accounting for both, a potential partner's ability as well as incentives to appropriate and create value within an R&D alliance. Our empirical findings show that NBFs are more likely to ally with pharmaceutical firms with the ability to create value, as long as these firms have the incentives to use their skills to create rather than appropriate value. Our study highlights the double‐edged sword nature of value creation skills and provides a deeper understanding into the contextual factors that determine when potential R&D partners will perceive such skills as increasing appropriation risks. Copyright © 2012 John Wiley & Sons, Ltd.