Alliances in the US pharmaceutical industry: The efffect of repeated partnerships on innovation

Abstract This paper analyses the effect of repeated partnerships on innovation in the pharmaceutical industry. A literature review on the relationship between alliances and partner choice on the one hand and innovation on the other is presented to come to five hypotheses. The data used for the empirical study are obtained from several sources. Data for a 1990-2004 alliance portfolio analysis are obtained from Thomson One Banker and SDC platinum. The number of patent applications during 2005-2008, to measure innovative performance, are obtained from the USPTO. This empirical study, with the firm as the unit of analysis, of 159 USA based pharmaceutical firms shows that an alliance portfolio with repetition(s) has a significant positive effect on innovation. The firms that opted for a repeated alliance once or multiple times during 1990-2004 outperform firms that never opted for a repeated alliance during that period. Keywords: Alliances, repetition, innovation, knowledge