DEATH OF DISTANCE? — BIOTECHNOLOGY AGGLOMERATION PATTERNS, ALLIANCE PROXIMITY, AND FIRM PERFORMANCE

Abstract

Leading biopharmaceutical firms need to dynamically optimize pipeline portfolios of internally and externally generated product candidates to ensure sustainable growth. This paper provides an empirical analysis of leading global biotechnology firms with respect to technology agglomeration patterns, proximity to alliance partners, and firm performance for the period 1996–2006. Findings suggest that the absolute number of technology and product alliances were approximately twice as important as proximity to partners in terms of firm performance. These results indicate that a strategy of relentless pipeline building, without regard to geographic proximity of alliance partners, may enhance relative and absolute performance of biopharmaceutical industry leaders.