Resource interdependence and project termination: An analysis in the biopharmaceutical industry

Abstract

Firms typically manage project portfolios with specific characteristics, including lengthy and high-risk projects with many similarities in human and technological resources and whose sequence and movement through the pipeline create longitudinal interdependencies. Interdependencies increase the complexity of project portfolios and create constraints in decision-making. This paper focuses on resource interdependencies and aims deepen our understanding of the extent to which resource interdependencies affect project termination. We study a sample of 417 new biotechnology-based drug discovery and development projects initiated by 25 biopharmaceutical SMEs. To test the hypotheses, we employ survival analysis and model terminations as a conditional probability and a corresponding hazard function. Our results show that for drug development projects, only certain types of interdependencies have a significant effect.