title: The moderating role of absorptive capacity and the differential effects of acquisitions and alliances on Big Pharma firms' innovation performance.
abstract: In the context of increased pharmaceutical innovation deficits and Big Pharma blockbusters' patent expirations, this paper examines the moderating role of firms' absorptive capacity in external innovation activities of Big Pharma firms. The study indicates a rising interest of Big Pharma in acquisitions of and alliances with biotechnology companies. Unfortunately, this increased interest is not reflected in the number of new drugs generated by Big Pharma. We find that acquisitions of biotech companies have negatively affected Big Pharma firms' innovation performance on average but these acquisitions might have a positive effect at higher levels of acquiring firms' absorptive capacity. Moreover, also acquisitions of pharma companies and alliances with biotech companies only have a positive effect on innovation performance at sufficiently high levels of absorptive capacity. The moderating role of absorptive capacity implicates that a tight integration of internal R&D efforts and (unrelated) external knowledge is crucial for harnessing complementarity effects.
authors.affiliation: Erasmus School of Economics, Applied Economics Department, Erasmus University, Rotterdam, Netherlands.|VU University, Biology and Society Research Department (Athena Institute), Faculty of Earth and Life Sciences, Amsterdam, Netherlands.
authors.forename: K D S
authors.initials: KD
authors.lastname: Fernald
authors.affiliation: Erasmus School of Economics, Applied Economics Department, Erasmus University, Rotterdam, Netherlands.
authors.forename: H P G
authors.initials: HP
authors.lastname: Pennings
authors.affiliation: VU University, Biology and Society Research Department (Athena Institute), Faculty of Earth and Life Sciences, Amsterdam, Netherlands.
authors.forename: J F
authors.initials: JF
authors.lastname: van den Bosch
authors.affiliation: Erasmus School of Economics, Applied Economics Department, Erasmus University, Rotterdam, Netherlands.
authors.forename: H R
authors.initials: HR
authors.lastname: Commandeur
authors.affiliation: VU University, Biology and Society Research Department (Athena Institute), Faculty of Earth and Life Sciences, Amsterdam, Netherlands.
authors.forename: E
authors.initials: E
authors.lastname: Claassen
mesh_terms: D001709:Biotechnology; D003299:Cooperative Behavior; D055808:Drug Discovery; D004345:Drug Industry; D010330:Patents as Topic