A Longitudinal study of the U.S. Biotechnology Industry:Which Resources Matter to Firm Innovation?

Abstract

Taking resource-based view (RBV) approach, we propose that the resources that a firm owns and has full control (firm level resources) and resources that a firm accesses through direct connection with other firms (network level resources) will impact firm innovation when effectively deployed by the firm. While previous research examined these factors separately, we take a holistic view and look into their effects on innovation simultaneously. We also introduce boundary conditions which can enhance firm innovation through their interaction with internal and external resources. Accordingly, we tested the role of financial resources and slack resources in the form of available slack and human slack at the firm level, and network size, network tie strength, and network diversity at the network level on the firm innovation. Our analysis of 306 firms from biotechnology industry over a span of 17 years suggests that available slack impact innovation negatively. However, this link is moderated by firm size such th...