An Examination of the Investments in US Biotechnology Firms By Foreign and Domestic Corporate Partners
Posted: 3 Oct 2004
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
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