The Control of Strategic Alliances: An Empirical Analysis of Biotechnology Collaborations

Merges, Robert P.; Lerner, Josh

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The Control of Strategic Alliances: An Empirical Analysis of Biotechnology Collaborations

NBER Working Paper No. w6014

41 Pages Posted: 27 Jun 2000 Last revised: 9 Dec 2022

See all articles by Robert P. Merges

Robert P. Merges

University of California, Berkeley - School of Law

Harvard Business School - Finance Unit; Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Private Capital Research Institute

There are 2 versions of this paper

Date Written: April 1997

Abstract

In this paper, we examine the determinants of control rights in technology strategic alliances between biotechnology firms and pharmaceutical corporations, as well as with other biotechnology firms. We undertake three clinical studies and an empirical analysis of 200 contracts. Consistent with the framework developed by Aghion and Tirole [1994], the allocation of control rights to the smaller party increases with its financial health. The empirical evidence regarding the relationship between control rights and the stage of the project at the time the contract is signed is less consistent with theoretical frameworks.

Suggested Citation: Suggested Citation

Merges, Robert P. and Lerner, Josh, The Control of Strategic Alliances: An Empirical Analysis of Biotechnology Collaborations (April 1997). NBER Working Paper No. w6014, Available at SSRN: https://ssrn.com/abstract=226424