Knowledge breadth and depth development through successful R&D alliance portfolio configuration: An empirical investigation in the pharmaceutical industry

Abstract

Organizational ambidexterity literature has emphasized the importance for firms to engage in dual activities of exploration (knowledge breadth) and exploitation (knowledge depth). However, little research has been done regarding what strategies firms need to adopt in order to achieve these two competing goals. This paper seeks to understand how different R&D alliance portfolio configuration strategies affect firms' ability to develop knowledge breadth and knowledge depth. The central argument is that different R&D alliance portfolio configuration strategies will produce different levels of knowledge structural benefit and relational capital benefit. A firm's preferences for different types of R&D alliance partners influence both the scope of external knowledge it is exposed to (knowledge breadth) as well as its ability to absorb and learn from its partners (knowledge depth). Using a panel data of 64 pharmaceutical firms over 15 years, our empirical results largely support the proposed hypotheses.