Abstract

We develop a model of product development based on the alliance portfolio of high technology firms. We draw on the capabilities perspective and argue that the impact of upstream, horizontal, and downstream alliances on the new firms’ rate of product development depends on the degree of specialization of the firm’s technological capabilities. Using a unique survey dataset of new technology firms in the German and UK biotechnology industries, the findings provide support for our model and demonstrate that technological capabilities are an important factor that mitigates the benefits and risks of alliances for the product development process of new technology firms. We discuss implications for the alliance literature.

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