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Effects of extent and diversity of alliancing on innovation: the moderating role of firm newness

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  • Marcus Wagner

    (Augsburg University)

  • Wilfried Zidorn

    (Universidad de Las Américas)

Abstract

The purpose of this paper is to show the varying effects of alliance portfolio size and heterogeneity on innovation in biotechnology firms. Previous literature has indicated that the number and heterogeneity of partners in an alliance portfolio might have positive effects on innovativeness. Yet, engaging in multiple and heterogeneous collaborations also raises managerial costs and complexity levels disproportionally, potentially causing detrimental performance effects. Analysis of a unique panel dataset suggests that engaging in many alliances generally has a positive influence on a firm’s innovation output. Furthermore, maintaining diverse alliance portfolios and a high extent of alliancing jointly affects a firm’s innovation output negatively. By additionally showing that younger firms benefit disproportionally from both alliance portfolio diversity and size, this study provides a more nuanced view of alliancing effects.

Suggested Citation

  • Marcus Wagner & Wilfried Zidorn, 2017. "Effects of extent and diversity of alliancing on innovation: the moderating role of firm newness," Small Business Economics, Springer, vol. 49(4), pages 919-936, December.
    • Handle: RePEc:kap:sbusec:v:49:y:2017:i:4:d:10.1007_s11187-017-9873-7
    DOI: 10.1007/s11187-017-9873-7
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    More about this item

    Keywords

    Alliances; Biotechnology; Innovation; Diversity; Entrants;
    All these keywords.

    JEL classification:

    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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