Non‐exclusive attention‐structure for inter‐organizational knowledge flow and performance of the pharmaceutical firm

Abstract

PurposeThe purpose of this paper is to raise an empirical question: whether a non‐exclusive licensing for a technological exchange contributes to the firm's performance better than an exclusive licensing (closed) structure.Design/methodology/approachData from 343 pharmaceutical firms were used to test effects of these exclusive versus non‐exclusive modes (attention‐structures) on inter‐firm knowledge flow and the firm's performance. Logistic regression was used to analyze the evidence.FindingsThe results revealed that the firm that used non‐exclusive licensing more than exclusive modes performs better. The performance was measured in two ways: efficiencies and returns, both on assets and on investment. It appears that non‐exclusive licensing is contributing more to the firm's overall performance than an exclusive licensing. This paper makes an argument in favour of an open attention‐structure.Research limitations/implicationsThe study is limited to one sector; it can be extended to other industrial sectors. Modes of governance can be extended to internalization or equity investment. The study is also limited to cross‐section analysis. Temporal factors can provide better insights. Knowledge type and its scope are also likely to influence the outcome. These areas provide opportunities for future research.Practical implicationsThe study emphasises that structures may precede technologies. Therefore, relevant institutions need to be considered in favour of a non‐exclusive attention‐structure. These findings may be relevant for future research and practice or policy making.Originality/valueThis paper extends the literature by supporting the argument that the usage of knowledge can increase its value to all relevant stakeholders. It provides empirical evidence to indicate that relatively open systems are better for high technology sectors. The study is likely to provide a solution, as well as trigger contentions, in the future.