An Examination of the Investments in US Biotechnology Firms By Foreign and Domestic Corporate Partners

Posted: 3 Oct 2004

See all articles by Joseph E. Coombs

Joseph E. Coombs

University of Richmond - E. Claiborne Robins School of Business

Ram Mudambi

Temple University - Department of Strategic Management

David L. Deeds

University of St. Thomas - Opus College of Business; Case Western Reserve University - Department of Marketing and Policy Studies

Abstract

This study examines the characteristics that make start-up biotechnology firms attractive alliance partners. We distinguish between firm specific and location-specific characteristics as well as between foreign and domestic corporate partners. We present and test a longitudinal model of alliance development based on data from 64 public biotechnology firms. The results provide evidence that foreign and domestic alliance capital inflows are driven by different factors. Firm-specific factors explain minimal variance in capital inflows from foreign alliance partners; rather, location-specific factors seem to matter more. The reverse is true for domestic alliance partners. Further, our results suggest that firm size moderates the relationship between location-specific factors and capital inflows from foreign alliance partners such that larger firms benefit more when located in technologically munificent environments.

Keywords: Agglomeration, alliances, biotechnology, clusters, investment, patents

JEL Classification: F23, O31, O32, M13

Suggested Citation

Coombs, Joseph E. and Mudambi, Ram and Deeds, David L., An Examination of the Investments in US Biotechnology Firms By Foreign and Domestic Corporate Partners. Journal of Business Venturing, Vol. 21, No. 4, pp. 405-428, 2006, Available at SSRN: https://ssrn.com/abstract=598226

Joseph E. Coombs

University of Richmond - E. Claiborne Robins School of Business ( email )

Richmond, VA 23173
United States

Ram Mudambi (Contact Author)

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States
215-204-2099 (Phone)
215-204-8029 (Fax)

HOME PAGE: http://sbm.temple.edu/~rmudambi/index.html

David L. Deeds

University of St. Thomas - Opus College of Business ( email )

1000 LaSalle Avenue
TMH 443
Minneapolis, MN 55403
United States

Case Western Reserve University - Department of Marketing and Policy Studies ( email )

Cleveland, OH 44106
United States

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