Drivers of Strategic Alliances: The Influence of Technological Diversification and Operational Efficiency

Abstract

For many decades, pharmaceutical firms have been forming strategic alliances to increase their R&D productivity and expand their geographical footprint. Recently, the alliances are driven by the increase of technological diversity and efficiency of firms. This paper analyses empirically the influence of internal factors on strategic partnership. We test our hypotheses using a longitudinal study of 186 strategic alliances in the biopharmaceutical industry in three major industrialized regions (U.S, Europe, and Asia) during the period from 2003 to 2013. The research findings reported that the last operational efficiency has a positive effect on the number of strategic alliances in the biopharmaceutical industry. However, technological diversity emerged as a negative driver of biopharmaceutical firms engaging in strategic alliances.