University alliances and firm exploratory innovation: Evidence from therapeutic product development

Abstract

This paper investigates the relationship between university alliances and firm exploratory innovation in the context of therapeutic product development. We build on organizational learning theory to elucidate that the use of university alliances is more positively associated with firm exploratory rather than exploitative innovation output. Moreover, we argue that the breadth of a firm's technological expertise strengthens the benefits of university alliances in the development of exploratory innovation output. Our empirical analysis is based on a panel dataset of 220 US therapeutic biotechnology firms from 2003 to 2010. Our findings support the contention that university alliances are differentially related to exploratory and exploitative innovation outcomes, and further indicate that firm technological breadth positively moderates the relationship between university alliances and firm exploratory innovation.