a b s t r a c tOur study investigates the outbound open innovation of firms engaged in technological venturing. Leveraging insights from the sociology theory and innovation literatures, we clarify whether social status helps entrepreneurial ventures overcome market imperfection and information asymmetry in outlicensing and illustrate the importance of specific aspects of social status building in this context. We also examine the effect of failure experiences on out-licensing. We take a dynamic view of desorptive capacity by studying an entrepreneurial venture's learning process, both internally, in terms of its own technology trajectory, and externally, through inter-organizational alliances. We apply a negative binomial model to our novel panel of 180 firms studied over an 18-year period with controls for stocks of clinical development activities, patenting and prior licensing activities. Empirical analysis enables us to observe the impact which the firms' technological and development status, reputation and desorptive capacity exert upon out-licensing volume. Prior outbound open innovation studies do not account for the heterogeneity of technology and R&D success and failure experiences observed in our study. We also demonstrate the contingency effect of external learning from alliances during the building-up of a firm's desorptive capacity, or the way in which the number of co-authoring partners in scientific publications negatively moderates the positive effect of the number of commercial alliances on the volume of its outlicensing deals. Our findings contribute to the understanding of external knowledge exploitation and complement important aspects of the literatures on outbound open innovation and desorptive capacity, offering empirically rich insights for bio-pharmaceutical firms into the drivers behind volumes of outlicensing deals.Crown
We investigate how the tendency to adopt a new product independently of social influence, the recipients' susceptibility to such influence, and the sources' strength of influence vary with social status. Leveraging insights from social psychology and sociology about middle-status anxiety and conformity, we propose that for products that potential adopters expect to boost their status, both the tendency to adopt independently from others and the susceptibility to contagion is higher for middle-status than for low- and high-status customers. Applying a nested case-control design to the adoption of commercial kits used in genetic engineering, we find evidence that status affects (i) how early or late one adopts regardless of social influence, (ii) how susceptible one is to such influence operating through social ties, and (iii) how influential one's own behavior is in triggering adoption by others. The inverse-U patterns in (i) and (ii) are consistent with middle-status anxiety and conformity. The findings have implications for how to use status to better understand adoption and contagion mechanisms, and for targeting customers when launching new products.
Entrepreneurial biotech and large pharmaceutical firms often form alliances to co-develop new products. Yet, new product development (NPD) is fraught with challenges that often result in project suspensions and failures. Considering this, how can firms increase the chances that their co-development alliances will create value? To answer this question, the authors build on insights from signaling theory to argue that prior project suspensions provide positive signals leading to an increase in value creation, while project failures have the opposite effect. In addition, drawing on insights from temporal construal theory, this research predicts that the strength of these effects is contingent on the stage along the exploration-exploitation continuum at which the alliance is formed. The authors undertook event study analyses of 248 alliances formed by 104 biotechnology firms from the United States and Europe listed on eight stock exchanges over an 8-year period between 1996 and 2003. The results confirm that prior NPD project suspensions have a stronger value creation effect (or prior failures have a weaker value destruction effect) in the case of exploration alliances in the upstream of NPD processes than in the case of moderate-scale exploitation alliances in the downstream of NPD. This study is among the first to examine how both prior NPD project suspensions and failures of firms affect the abnormal returns achieved from codevelopment alliances. This research therefore contributes to the innovation literature by honing a better understanding of setbacks and failures in NPD. Moreover, the findings contribute to the literature on strategic alliances by identifying new conditions under which firms can create or preserve value. This research also contributes to signaling theory by providing evidence of the moderation effect caused by the signaling environment. Finally, this study contributes to the entrepreneurial literature on value creation for entrepreneurial firms in alliances following adverse events. Practitioner PointsManagers should be aware that signaling suspensions and failures to investors can influence their expectations of future NPD performance and consequently impact shareholder value created through subsequent NPD alliances. Proactive portfolio management, including deprioritization of existing projects while allocating and re-allocating resources to active projects, can send out positive signals to investors to create better value in NPD alliances. For those firms planning to build a culture of tolerance toward failure, entering co-development alli-ances may be more desirable at exploratory stages of the NPD process than later on.
PurposeIn recent years, industrial firms have been moving from selling pure products to selling smart services. Yet limited empirical evidence exists about how the new markets for these novel services are created. This paper seeks to extend current theory and create new insights by studying the new services market creation process in nascent industrial fields.Design/methodology/approachThe authors' research design is a multiple‐case, inductive study that uses in‐depth archival and field data to track closely how five industrial firms created new market for new types of services.FindingsThe authors find that firms adopt a holistic initiative to address the challenges in new services market creation. In particular, they use three interrelated strategies to create a new market: co‐creating with customers, innovating in different ways and exploiting institutional forces.Research limitations/implicationsThe study focused only on life science research services. Moreover, in‐depth field interviews were used only in a small number of firms.Practical implicationsTo successfully develop a new market for an industrial service innovation, a firm should innovate within and outside the firm, win over customers for adopting, adapting the service innovation and identifying its new uses, and utilize institutional mechanisms to legitimatize, claim and control the emerging market.Originality/valueThis paper's central contribution is a holistic framework of the longitudinal processes by which successful firms develop new services and construct new markets.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.