How do small firms manage their alliance strategies with large firms? This study compares the relative impacts of exploration and exploitation alliances with large firms on small firms' valuation. Integrating the literatures on the exploration/exploitation paradigm and alliance governance, we argue that exploitation alliances with large firms will on average generate higher values for small firms than exploration alliances with large firms due to a heightened risk of appropriation in exploration alliances. However, if small firms can manage their alliances with large firms via proper alliance governance, they will increase their valuations from exploration alliances with large firms. Analyses of the U.S. biopharmaceutical industry from 1984 to 2006 largely support our hypotheses. Copyright © 2013 John Wiley & Sons, Ltd.

Although new ventures are often started by founders with prior shared experience, which has been shown to benefit new venture performance, the mechanisms underlying this effect remain under-examined. It therefore becomes challenging to exploit this entrepreneurial resource in practice. Drawing insights from the team familiarity and cognition literatures, I posit that the prior shared experience effect is partially mediated by a team-level cognitive process-transactive memory system that enables founding teams to effectively and efficiently integrate their members' expertise and skills. Two team-level factors-task similarity and intra-team trust further strengthen the effects of transactive memory systems because they provide golden opportunities and strong motivation for team members to utilize their transactive memory systems. Analyses using survey data collected from approximately 100 start-ups in four regions of China largely support these hypotheses. The theoretical and practical implications of these results are discussed.

We focus on the firm's decision to enter insular technology domains and its effect on the impact that its subsequent innovation has on the field. Insular domains are technical domains that rely heavily on prior innovations within the same domain for subsequent innovations. We show that the returns to entering insular domains vary with the firm's depth and breadth of knowledge. By analysing data from 128 biotechnology firms over a 20-year period, we find that the relationship between depth of technological capabilities and technology impact is nuanced: depth is necessary but not sufficient for high impact innovation. Firms whose knowledge is spread over disparate domains have negative returns from entering insular domains. The implications of these findings for theories of innovation and the discovery of entrepreneurial opportunities are discussed. Copyright (c) Blackwell Publishing Ltd 2008.

Prior research suggests that a high technology start-up's innovative capability and inter-firm network influence its performance and consequently, firm valuation. Few studies consider their joint influence and even fewer consider the temporal change of those effects on firm valuation. In this study, we propose that firm age, a key organizational variable, represents both the development of organizational routines from a start-up's perspective and the accumulation of accessible information from an investor's viewpoint. As such, an investor's evaluation of a high technology start-up's innovative capability and inter-firm network evolves with firm age. Using panel data of 170 biotechnology start-ups, our results suggest that the relative value of network status declines while the impact of innovative capability increases with firm age. Interestingly, there is a growing complementary effect of innovative capability and network heterogeneity on firm valuation. The implications of these findings for entrepreneurial practice and theories of firm capabilities and interfirm network are discussed. Executive summaryTechnology start-ups with high growth potential tend to be resource-constrained and often require infusion of financial capital. To do so, investors and entrepreneurs will arrive at an estimate of the market value or "valuation". The valuations that investors place on start-ups will influence the proportion of equity shares disbursed to raise adequate funds to ensure firm growth and survival. Consequently, both entrepreneurs and investors consider valuation to be an important metric that determines their equity proportion and their financial returns from investing into the venture. Therefore, understanding the factors affecting new ventures' valuation is an issue of substantial importance.We maintain that investors will examine information on a start-up's innovative capability and inter-firm network to arrive at an estimate of its financial value. Information suggesting superior innovative capability and external connections increases the confidence of investors placed on the start-ups. Prior studies have provided some evidence that innovative capability and interfirm network attributes are positively correlated with higher firm valuation for new ventures. Whereas studies confirm the positive linkage between both kinds of information and firm valuation in start-up context, there are gaps in our understanding of the combined effect between innovative capability and inter-firm network and more importantly, the temporal change of those effects. Do investors value the potential complementary effect between innovative capability and inter-firm network? Does one kind of information become more important, or stated differently, does its value impact increase with firm age? In this study, we posit that Journal of Business Venturing 25 (2010) 593-609 ☆ The views and opinions expressed herein are those of the authors, and should not be attributed to Cornerstone Research. ⁎ Corresponding author.

Does familiarity with alliance partners promote breakthrough innovations? This study draws on the literature of interorganizational routines to examine the impact of repeated R&D collaborations within a firm's alliance portfolio on its breakthrough innovations. Specifically, we contend that the benefits and liabilities of interorganizational routines, arising from alliance partner repeatedness at a firm's alliance portfolio level, lead to an inverted U‐shaped relationship between alliance partner repeatedness and breakthrough innovations. Further, we build on the recent theoretical development of interorganizational routines to propose that technological dynamism will make the inverted U‐shaped relationship steeper. Analyses of approximately 230 firms in the US biopharmaceutical industry from 1983 to 2002 support our hypotheses. Our findings provide important implications for research on alliance portfolio and management of firm innovation.

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Entrepreneurs in emerging economies face not only more opportunities but also heightened levels of uncertainties than their peers in developed economies. They, therefore, frequently encounter surprising events arising from rapid and chaotic environmental changes. Extant research, however, provides only sketchy accounts regarding how founding teams respond to surprises. In this study, we propose that founding teams' transactive memory systems (TMS) situated in the unique contextual conditions prevalent in most emerging economies will affect their perceptions regarding how to bridge the knowledge gaps arising from surprises. We test our hypotheses with survey data collected from 137 start-ups in China. Our results suggest that in emerging economies where market supporting institutions are deficient, founding teams with strong TMSs are less inclined to acquire external knowledge but are more prone to improvise in response to surprises than founding teams with weak TMSs. Negative surprises seem to strengthen the above relationships. We conclude by discussing the theoretical and practical implications of this study.

The E‐W trending Central Qiangtang metamorphic belt (CQMB) is correlated to the Triassic orogeny of the Paleo‐Tethys Ocean prior to Cenozoic growth of the Tibetan Plateau. The well‐exposed Lanling high‐pressure, low‐temperature (HP‐LT) metamorphic complex was chosen to decipher the process by which it was exhumed, which thereby provides insights into the origin of the CQMB and Qiangtang terrane. After a detailed petrological and structural mapping, three distinct N‐S‐trending metamorphic domains were distinguished. Microscopic observations show that core domain garnet (Grt)‐bearing blueschist was exhumed in a heating plus depressurization trajectory after peak eclogitic conditions, which is more evident in syntectonic vein form porphyroblastic garnets with zoning typical of a prograde path. Grt‐free blueschist of the mantle domain probably underwent an exhumation path of temperature increasing and dehydration, as evidenced by pervasive epidote veins. The compilation of radiometric results of high‐pressure mineral separates in Lanling and Central Qiantang, and reassessments on the published phengite data sets of Lanling using Arrhenius plots allow a two‐step exhumation model to be formulated. It is suggested that core domain eclogitic rocks were brought onto mantle domain blueschist facies level starting at 244–230 Ma, with exhumation continuing to 227–223.4 Ma, and subsequently were exhumed together starting at 223–220 Ma, reaching lower greenschist facies conditions generally after 222–217 Ma. These new observations indicate that the CQMB formed as a Triassic autochthonous accretionary complex resulting from the northward subdcution of the Paleo‐Tethys Ocean and that HP‐LT rocks therein were very probably exhumed in an extensional regime.