The Innovative Performance Determinants in Biotechnology Industry's Joint Ventures: Joint Ventures from 1976 to 2013

Abstract

The main objective of this paper is to develop and empirically examine the determinants of formation and innovative performance in biotechnology industrys joint ventures measured by number of patents application. Author conducts empirical studies through negative binomial method to test the hypotheses from all biotechnologys joint venture cases. The combination of two unique characteristics of biotechnologys industry (long product development cycle, high R&D investment, low success rate) and joint venture (risky, uncertain, and high failure rate) questions the factors that drive the establishment and innovative performance. So far, there has been no study questioning the appropriate quantitative measurement for innovative performance in the biotechnologys joint venture. This study brings together two bodies of literature. First, we will examine the factors that contribute to establishing joint venture and second, we seek to identify the factors that enhance or impede innovative performance in established joint venture in biotechnology industry. We argue that technology transfer, parents business relatedness and prior alliance experience will have positive influence on the innovative performance, which is measured with number of patent count. These hypotheses will be tested using SDC Platinum, DataStream, and the USPTO. The sample covers 1023 joint ventures, which are all the biotechnologys joint venture established from 1976 to 2013. Amongst them, 699 successfully established joint ventures and 99 joint ventures issued patents to measure the innovative performance.