Research summary: Strategic alliances are undertaken to create value through complementarities of resources and capabilities of the partner firms. This paper uses a recently developed estimator of matching games, i.e., the maximum score estimator, to advance strategic management research on partner selection in strategic alliances, with a focus on the formation of research alliances in the biopharmaceutical industry. We contribute to the literature in three ways. First, we develop a matching framework to study strategic alliances, taking a market perspective that explicitly incorporates key features of alliance formation: two‐sided decision making; quest for complementarities between indivisible and heterogeneous partner attributes; and competition on each side of the market for partners on the other side of the market. Second, we assess the relative performance of the maximum score and standard discrete choice estimators by performing simulations based on known functional relationships in various matching scenarios. Third, within the context of biopharmaceutical research alliances, we hypothesize and find support using the maximum score estimator for complementarity in partner size and in upstream research capabilities. Managerial summary: A critical question facing managers who seek to benefit from strategic alliances is “whom to ally with”. Typically, each party seeks a partner whose attributes reinforce their own. This paper explains that the interaction of these preferences leads to a market-wide sorting of alliance partners. Since the value created by an alliance is driven by attributes of all alliance partners, firms cannot successfully bid financial resources to get access to their most preferred partner. Instead, managers need to understand the market-wide competition and invest in the “right” mixture of attributes to make their firm more attractive in the market for alliance partners. Using this framework, we highlight firms' sizes and research capabilities as two drivers of partner selection and sorting in bio-pharmaceutical research alliances. Copyright © 2015 John Wiley & Sons, Ltd.

Research summary:We examine firms' technological investments during an industry's incubation stage-the period between a technological breakthrough and the first instance of its commercialization. Using the agricultural biotechnology context, we develop stylized findings regarding the understudied knowledge evolution preceding product evolution in an industry's life cycle, the trend and diversity of firms undertaking technological investments in anticipation of industry emergence, their leverage of markets for technology and corporate control, and their use of alternative modes of value capture. We juxtapose these stylized findings with existing literature to identify new theoretical insights, and set the stage for future scholarly work to develop and test new theories for the incubation period, examine its existence in other industries, and study its impact on subsequent firm and industry evolution.Managerial summary: New technological breakthroughs present managers of existing firms and aspiring entrepreneurs with opportunities to create altogether new industries. During the vibrant incubation period, we find that multiple firms capitalize on diverse knowledge bases to shape the industry's knowledge evolution and also capture economic value in diverse ways. Existing firms in the obsolescing industry are more likely to become targets in acquisitions given their complementary knowledge. Science-based start-ups are more likely to engage in acquisitions and collaborations with established firms. Diversifying firms are more likely to commercialize products after leveraging of internal development, acquisitions, and alliances. Our study highlights the importance for managers to think about "success" and "failure" across multiple yardsticks of performance, rather than only as product commercialization as the sole goal.

In the extant vertical integration literature, the question of how a firm's portfolio of outsourced work is managed across suppliers has been relatively understudied. We seek to advance this area of research by examining factors that influence how concentrated the firm's outsourcing is among its set of suppliers. Using data on the outsourcing of patent legal services, we find empirical evidence that outsourced knowledge-based service work is concentrated in the hands of fewer suppliers when (1) it requires greater firm-specific knowledge, (2) there is a higher level of interrelatedness across outsourced projects, (3) the firm's reliance on outsourcing is high, (4) its outsourced projects are focused on a narrower (capability) domain, and (5) the technological dynamism of this domain is low. Our study suggests that examining portfolio-level phenomena in outsourcing is a useful complement to the predominant focus on transaction-level outcomes in prior research because it provides insights into how firms manage trade-offs across their entire set of outsourced projects.

Research summary: This article examines the capability antecedents of firm entry into nascent industries. Because a firm's technological investments in nascent industries typically occur before market entry, this study makes a distinction between firm capabilities at the time of market entry and at the time of initial investment. At the time of market entry, core technical capabilities and complementary assets influence the likelihood of entry. However, at the time of investment, a firm's integrative capabilities as well as the initial stocks of related technical capabilities and complementary assets become critical, as they enable endogenous development of core technical capabilities and complementary assets by the time of entry. The empirical sample consists of firms involved in field experiments in agricultural biotechnology during the period 1980–2010. Managerial summary: New product commercialization in a nascent industry typically requires access to not only core technologies of the focal industry, but also supporting commercialization assets. However, firms may not possess these critical capabilities when they first invest in the industry. Instead, empirical evidence from the context of agricultural biotechnology shows that at the time of first investment, a firm's integrative capabilities partly explain their likelihood of entry. Integrative capabilities encompass a set of practices that enable effective coordination and communication, and in turn put firms in an advantageous position to develop the needed capabilities by the time of entry. Copyright © 2017 John Wiley & Sons, Ltd.

Research summary Industry evolution scholars define industry inception as the first instance of product commercialization, focusing on subsequent time periods of growth and maturity. Left understudied are the triggers, actors, and actions preceding industry inception. We integrate recent research in a preliminary framework, conceptualizing the incubation stage as activated by a “trigger” event—a scientific discovery, unmet user need, or mission‐oriented grand challenges—and continuing through the first instances of product commercialization. We focus on illuminating actions of multiple and heterogeneous actors that help reduce high technological and demand uncertainty, thereby shaping industry structure and strategic action post‐commercialization. To point, although the actors may be different, their actions follow a similar theme. We hope this framework spurs future research investigating the understudied incubation stage of new industries. Managerial summary Numerous visionaries––inventors, entrepreneurs, scientists, users, managers, policy makers, and others––spend decades laying the groundwork that leads to the creation of new industries. Their contributions are critical, yet have received little systematic attention. Here, we illuminate their actions during the understudied “incubation” stage sparked by a trigger event and culminating in the first instance of product commercialization. We begin by documenting three triggers: scientific and technological discoveries, unmet user needs, and mission‐oriented grand challenges. We show that following a trigger event, visionaries solve the technological problems required to transform an innovative idea into a viable commercial product and engage potential adopters and stakeholders; they do this by both applying their existing knowledge base and engaging in experimentation. Their efforts set the stage for subsequent commercialization efforts. Copyright © 2017 Strategic Management Society.