Factors Affecting the Outbound Open Innovation Strategies in Pharmaceutical Industry: Focus on Out-Licensing Deal

Abstract

The pharmaceutical industry is a high-technology industry that requires a combination of in-depth knowledge from various fields. It is characterized by high cost, high risk and a long-term perspective due to the high level of regulation. In addition, it is known that research and development (R&D) productivity is deteriorating in the industry. Under these conditions, the importance of open innovation strategies has been emphasized. Under an open innovation system, it is essential for firms to develop several dynamic capabilities to effectively manage their resources both internally and externally. Using a systematic framework of dynamic capabilities suggested by previous studies, this study focuses on the determinants affecting firms’ desorptive capacities, which are measured as the number of out-licensing deals, as an indicator for the performance of their outbound innovation. For the analysis, negative binomial regression is employed and inventive capacity and connective capacity are selected as the determinants of the licensors’ desorptive capacity. The results of regression analysis reveal that inventive capacity does not have a significant effect on desorptive capacity and that only connective capacity has a significant positive effect on desorptive capacity.

Can User Innovation Grow a Firm? The Case of the Korean Smart Media Industry

“…However, as indicated by the characteristics of the target firms, the majority of smart media firms are young, an average of 10 years, which makes it difficult to accumulate knowledge and experience of various businesses, and most of them are small and medium businesses, except network service providers. In these situations, outbound open innovation, such as license sales, is beneficial to firm performance [26], and the increase in simple patent and copyright development was in contrast to R&D activities and market-first products or services, which were positively correlated with performance. This had a negative effect on performance.…”

“…R&D concentration shows a firm's R&D status. The value of total R&D expenses divided by sales is the R&D concentration ratio [24,26,50]. The present research measured the value of expenses and sales in 3 years.…”

“…Strategic alliances are about co-development, sharing, and exchanging products, technology, or services among firms [22][23][24]. These alliances show network characteristics, and the amount of collaboration is related to the results of innovation [25,26].…”

“…In He and Lee et al [14,26], exploitation and exploration innovation strategies were separated as part of the strategies affecting business performance. The simultaneous pursuit of exploitation and exploration contributes to a growth of average sales, and exploitation and exploration innovation strategies have positive effects on product innovation intensity.…”

Selecting a Public Service Outsourcer Based on the Improved ELECTRE II Method with Unknown Weight Information under a Double Hierarchy Hesitant Linguistic Environment

“…Over the last two decades, to alleviate business pressure and focus on core competencies, firms are increasingly utilizing not only their own technologies, but also external resources and technologies [1][2][3][4], which is referred as open innovation (OI). Later, the OI phenomenon rapidly spread into many industries, and has received more and more attention [5][6][7][8]. As a form of OI, outsourcing has become a key component for business performance and has quickly expanded into the field of public services.…”