Not Your Stepping Stone: Collaboration and the Dynamics of Industry Evolution in Biotechnology

Description of Biotechnology Agreements

Download 154.14 Kb.

Page	5/5
Date	05.05.2018
Size	154.14 Kb.
	#47520

1 2 3 4 5

Description of Biotechnology Agreements

Type of Tie	Typical Kinds of Partners
R&D: Biotech firm develops research program with another organization for a specific target. Finance: Partner invests funds in a BF, or BF invests funds (and usually scientific expertise) in a partner.	Other biotechs, pharmaceutical corps., universities, research institutes. Venture capital firms, larger biotech companies, pharmaceutical corps.

Licensing: BF either licenses its intellectual property (IP) to another party, or acquires license to others’ IP.	Universities, BFs, pharmaceuticals.

Clinical Trials/Evaluation: BF has partner conduct trials on human subjects for FDA approval.	Research hospitals, organizations specializing in clinical trials.

Commercialization: BF contracts with partner to manufacture and market its product, or BF agrees to supply product to a distributor for sales.	Large pharmaceutical or chemical corps., larger BFs.

Complex: a tie between a BF and another party that involves multiple activities (i.e., R&D and marketing)	Any partner (except venture capital).

Table 2: Descriptive Statistics for Biotechnology Firms

	Mean	Standard Deviation	Maximum	N firm-years*
Size (employees)	153.52	435.42	7500	2946
Age (years)	7.7575	5.7670	42	4144

Number of ties:
R&D	1.8727	2.9779	25	4178
Finance	2.7252	4.1790	52	4178
Licensing	1.5785	3.1784	43	4178
Evaluation	0.0764	0.3983	6	4178
Commercial	1.1309	2.5444	23	4178
Complex	1.1168	2.4496	32	4178
Total	8.5005	10.5118	91	4178

Number of types	2.4050	1.5371	6	4178

Number of ties per partner	1.1501	.2821	5	3864

Earnings ($M)	-48.0	32.33	879.4	1061

* The differences in the number of firm years reflect missing data for some companies with respect to size and/or age. With respect to the number of ties, a small number of firms have no ties of any kind. The earnings data are based on 154 publicly traded firms in the United States and cover those years for which financial reports are available.

Table 3: Effects of firm growth on depth of collaboration.*

Dependent Variable at time t

Overall number of ties

Number of types of tie activity

Number of complex ties

Size at time t-1

.6160****

(.0392)

.0294***
(.0061)

.1113****
(.0119)

Within-firm r-square

.10

.03

.09

Full r-square

.83

.69

.84

N firm-years

2349

2349

2349

N firms

407

407

407

All models include both firm and year fixed effects.

Significance levels: ***=p<.001; ****=p<.0001
* Only firms with at least one tie at time t-1 are included in these analyses.

Table 4: Effects of aging on scope (initial use of each type) of collaborative activity.*

	Number of ties of specific type of tie activity at time t
	R&D	Finance	Licensing	Evaluation	Commercial	Complex
Age at time t-1	.0311**** (.0048)	.0267**** (.0050)	.0288**** (.0037)	.0180* (.0012)	.0246**** (.0030)	.0281**** (.0038)

Within-firm r-square	.03	.02	.04	.01	.03	.03

Full r-square	.35	.32	.33	.24	.28	.32

N firm-years	1482	1363	1658	3220	2136	1839

N firms	319	291	327	439	374	360

All models include fixed firm and year effects.

Significance levels: *=p<.05; ****=p<.0001.
* Only firms without specific type at time t-1, but with at least one other type at time t-1are included in these analyses.

Table 5: Effects of aging on reach (number of kinds of partners) for each type of collaborative activity.*

	Number of kinds of partners by specific type of tie activity at time t
	R&D	Finance	Licensing	Evaluation	Commercial	Complex
Age at time t-1	.0530** (.0107)	.0715**** (.0106)	.0471**** (.0096)	.0260* (.0107)	.0502*** (.0139)	.0047 (.0038)

Within-firm r-square	.03	.02	.02	.01	.01	.00

Full r-square	.55	.70	.66	.61	.61	.57

N firm-years	1570	2239	1495	1616	1986	1140

N firms	306	381	295	312	358	244

All models include fixed firm and year effects.

Significance levels: *=p<.05; **=p<.01;***=p<.001;****=p<.0001.
* Only firms with at least kind of partner for specific type at time t-1are included in these analyses.

Table 6: Effects of positive earnings on reinvestment in collaborative R&D.*

	Number of R&D alliances at time t
Positive earnings at time t-1	2.0500**** (.5038)

Within-firm r-square	.03

Full r-square	.73

N firm-years	716

N firms	133

All models include fixed firm and year effects.

Significance levels: ****=p<.0001
* Only firms with at least one R&D alliance at time t-1are included in these analyses.

1 There is clearly an important difference between formal and informal organizational linkages. Contractual relationships are crafted with considerable care and typically entail milestones or covenants dictating certain types of expected performance. Informal linkages more typically involve unwritten understandings, quid pro quos, and tacit agreements. Moreover, informal relationships are often entangled in ongoing friendships among employees of organizations. Such interpersonal ties are often less calculative and voluntaristic than formal ties. Our focus here is on direct organization to organization relationships that involve the transfer of resources and/or information. In companion work, we are collecting “founding stories” for all the firms in our database, and it is clear that at the point of organizational founding, the ties linking organizations are more often person-to-person linkages, and that formal affiliations come later.

2 Obviously, success is a relative term. None of these firms are hugely successful in comparison to software giant Microsoft or a computer firm like Dell. But success is used multi-dimensionally here; these firms are growing in size, surviving, and, in some cases, generating sufficient revenues for reinvestment.

3 We thank Steve Klepper for first emphasizing this point to us.

4 An important question is just how much diversity can an organization sustain. In a recent paper, we found declining returns to network diversity and experience after an organization crossed a threshold of connected ness. Once centrally positioned, with a portfolio of partners, there were scant returns to performance from adding more collaborators (Powell et al, 1999).

Download 154.14 Kb.

Share with your friends:

1 2 3 4 5