'Absorptive link': an absorptive capacity and alliance approach to biotechnological product success

Abstract

As biotechnologies are increasingly specialized and interrelated, the research question posed by this study is: what determines a biotechnology firm's product performance, if the development and commercialization of drug products require multiple technologies that are not possessed by any one firm? In drawing on concepts from strategic alliance and absorptive capacity research, this study develops and empirically examines a concept of 'absorptive link' in the biotechnology industry. A firm's absorptive link underscores that a firm's ability to develop new products stems from its prior knowledge in commercializing new applications of resources held by not only the firm, but also that of its alliance partners. Such a concept generated 6 testable hypotheses to which were mostly supported in this study's Poisson regression analysis of the biotechnology industry. This study concludes by offering three key contributions to product performance research.