Strategic alliances and the rate of new product development: An empirical study of entrepreneurial biotechnology firms

1996 ◽  
Vol 11 (1) ◽  
pp. 41-55 ◽  
Author(s):  
David L. Deeds ◽  
Charles W.L. Hill
Keyword(s):  
Empirical Study ◽  
Product Development ◽  
New Product Development ◽  
Strategic Alliances ◽  
New Product ◽  
Biotechnology Firms

Strategic alliances as a mechanism for wealth creation in the biopharmaceutical industry: An empirical analysis of the Spanish case

2006 ◽  
Vol 12 (3) ◽  
Author(s):  
Emma Gutiérrez De Mesa Vázquez ◽  
Juan Angel Jiménez Martín ◽  
Juan Mascareñas
Keyword(s):  
Product Development ◽  
New Product Development ◽  
Strategic Alliances ◽  
Positive Function ◽  
New Product ◽  
Biopharmaceutical Industry ◽  
Wealth Creation ◽  
Biotechnology Firms ◽  
Positive Effects ◽  
Complementary Assets

The paper studies strategic alliances signed between traditional pharmaceutical companies (TPCs) and new biotechnology firms (NBFs) in Spain, on the initial basis that a firm's rate of new product development is a positive function of the number of strategic alliances that it has entered into. Nevertheless, we believe, as do others, that although strategic alliances may initially have positive effects on that rate, this relationship may exhibit diminishing returns. We suggest that the relationship between the number of alliances and the rate of new product development may be an inverted U-shape in the Spanish biopharmaceutical industry. Our regression model provides evidence to support such a relationship. However, the results suggest that only when the firm enters into too many alliances does diminishing return and ultimately negative return set in. The main strategic conclusion for the biopharmaceutical industry is that alliances represent a viable way for biopharmaceutical companies to gain access to the complementary assets required to increase their rate of new product development. A major contribution to this investigation is the empirical assessment for the Spanish biopharmaceutical industry.

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