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Collaboration vs. Competitive Advantage Across the Value Chain:A Study of Pharmaceutical Consortia
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Author: Joel West, Keck Graduate Institute
Author: Paul Olk, U. of Denver
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While the pharmaceutical industry provides a crucial role in improving human health, over the past 20 years established firms have faced declining efficiency and effectiveness of their R&D efforts. In response, in the early 21st century dozens of industry- supported R&D consortia have been formed to create and share knowledge between private and public participants. This project will study these consortia and how firms reconcile the open nature of consortia with their traditional IP-based business models. This study offers the first large-scale study of this new form of cooperation. Based on a new proprietary database, it identifies more than 50 U.S.-based pharmaceutical consortia and situates them across the drug development value chain. Using interview data, it focuses on four consortia that represent different stages of the value chain.
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Search Terms: pharmaceutical | cooperation | open innovation
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Paper is No Longer Available Online: Please contact the author(s).
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M&A as Substitutes or Stepping Stones to Innovation? Examining the Impact of Financial Crisis
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Author: Jiwon Hwang, Columbia Business School
Author: Christine Choi, Seoul National U.
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With the increase of technological knowledge intensive mergers and acquisitions (M&A), the importance of the effect that M&A has on post-acquisition R&D intensity has been on the rise. This research strives to examine the strategic choice of whether M&A are used as substitutes or stepping stones to subsequent innovation efforts, by utilizing propensity score matching and DID methods to control for selection bias and unobserved firm time-invariant heterogeneity. This paper further studies whether such choices are influenced by macro environmental uncertainty by comparing deals conducted during financial crisis and those conducted in non-financial crisis using the triple difference model. The empirical results indicate that M&A are used as stepping stones rather than substitutes in general yet the positive effect is greater for M&A conducted during non-financial crisis than those conducted during the crisis period.
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Search Terms: M&A | Innovation | Financial Crisis
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Paper is No Longer Available Online: Please contact the author(s).
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Crowdsourcing and market performance
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Author: Francesco Cappa, Luiss Guido Carli U.
Author: Raffaele Oriani, Luiss Guido Carli U.
Author: Michele Pinelli, Luiss Guido Carli U.
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In the last years, it became progressively clear that the process of innovation involves complex social practices in which the interactions between multiple parties play a central role: external contributors are able to come up with brilliant ideas and extreme outcomes. Thus, firms are increasingly using crowdsourcing as an open innovation mechanism for gathering fresh ideas and for achieving explorative outcomes. The organization of crowdsourcing projects represents a signal of firms’ efforts towards distant search, which is valued by stockholders. Through an event study, we demonstrate that crowdsourcing projects announcements trigger positive price shocks, reflecting investors’ positive expectations about companies’ future profits, and we highlight what factors moderate such reaction.
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Search Terms: Crowdsourcing | stock market reaction | event study
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Paper is No Longer Available Online: Please contact the author(s).
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Unraveling Value Capture Strategies from Modular Products: The Case of Automotive Industry
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Author: Jose-Mauricio Galli Geleilate, Florida International U.
Author: Ronaldo C. Parente, Florida International U.
Author: Bruno Barreto De Goes, Temple U.
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Are suppliers capable of increasing industry value capture by investing in modular components? Despite the abundant research on product modularity and modular production systems, the understanding on how module providers are able to capture value from such components is still scant in the literature. This study fills this gap by analyzing how module suppliers achieve a sustained competitive advantage by increasing their focus on modular products and innovations as well as managing their vertically related operations. Results from the global automotive industry reveal that suppliers are capable of capturing more value from modules when investing in modular innovations, integrating manufacturing operations via M&As and strengthening downstream relationships through strategic alliances. Managerial and theoretical implications from a transaction costs and capabilities perspectives are assessed.
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Search Terms: Modularization | Value Capture | Automotive
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Paper is No Longer Available Online: Please contact the author(s).
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