Portfolios of Interfirm Agreements in Technology-Intensive Markets: Consequences for Innovation and Profitability
Research Question
New product development has a broad range of determining factors. Such determining factors include the voice of the customer, internal knowledge development, and organizational processes and capabilities. In technology-intensive markets, firms need to corporate with each other to develop new products. "However, most research has concentrated on interfirm agreements in isolation, with special attention to dyadic information transfer and coordination and relation embeddedness" (p. 88). This research is a test of the pharmaceutical industry; it provides support for a development theory but yields unexpected insights. It asks if research and development affect firms' portfolios, if the advances enhance profitability, and if innovations affect profitability.
Hypothesis
H1: Greater Technological diversity of a firm's portfolio of interfirm research and development agreements enhances the firm's (a) radical innovation and (b) incremental innovations
H2: Higher levels of repeated partnering of a firm's portfolio of interfirm research and development agreements enhance the firm's (a) radical innovation and (b) incremental innovation.
H3: A firm's stock of radical innovations and its stock of incremental innovations enhance profitability.
H4: The effect of a firm's stock of radical innovations on profitability is greater than the effect of a firm's stock of incremental innovations on profitability.
H5: When the level of innovation is controlled for, greater technological diversity of a firm's portfolio of interfirm research and development agreements l ...