Tapping Deep Pockets: The Role of Resources and Social Capital on Financial Capital Acquisition by Biotechnology Firms in Biotechpharma Alliances

23 Pages Posted: 21 Nov 2008

See all articles by Shanthi Gopalakrishnan

Shanthi Gopalakrishnan

New Jersey Institute of Technology

Joanne Scillitoe

Michigan Technological University - School of Business and Economics

Michael D. Santoro

Lehigh University - Department of Management

Abstract

Strategic alliances with pharmaceutical firms allow small biotechnology firms to acquire needed financial capital in exchange for sharing new, cutting-edge technologies. This study draws from aspects of resource-based view and social capital theory to examine the factors that influence the extent of financial capital biotech firms acquire when forming an alliance with pharmaceutical firms. Using a sample of 184 alliances from the period 1995-2000, we found that alliances where the pharmaceutical firm has greater management control are associated with greater acquisition of financial capital by the biotech firm. We also found that the credibility of the pharmaceutical firm is positively associated with the extent of financial capital acquired by the biotechnology firm and that the number of patents that the biotech firm has is negatively associated to the financial capital the biotech firm receives. We discuss the implications of our findings for theory, research, and management practice.

Suggested Citation

Gopalakrishnan, Shanthi and Scillitoe, Joanne and Santoro, Michael D., Tapping Deep Pockets: The Role of Resources and Social Capital on Financial Capital Acquisition by Biotechnology Firms in Biotechpharma Alliances. Journal of Management Studies, Vol. 45, Issue 8, pp. 1354-1376, December 2008. Available at SSRN: https://ssrn.com/abstract=1303769 or http://dx.doi.org/10.1111/j.1467-6486.2008.00777.x

Shanthi Gopalakrishnan

New Jersey Institute of Technology ( email )

University Heights
Newark, NJ 07102

Joanne Scillitoe

Michigan Technological University - School of Business and Economics ( email )

Houghton, MI 49931
United States

Michael D. Santoro

Lehigh University - Department of Management ( email )

Bethlehem, PA 18015
United States

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