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Equity Links and Information Acquisition in Biotechnology Alliances

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Author Info

  • Darren Filson

    (Claremont Graduate University)

  • Rosa Morales

    (Claremont Graduate University)

Abstract

We use a simple model of collaborative innovation to structure an empirical analysis of minority equity links in biotechnology alliances between clients and R&D firms. In the model, an equity link is an investment in information acquisition: it improves the ability of the client to learn about the R&D firm’s ability and the alliance project’s quality. The model generates several testable hypotheses about how the R&D firm’s project characteristics and previous alliances affect the use of equity links in new alliances. We test the hypotheses using a large data set of biotechnology alliances and find empirical support.

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Bibliographic Info

Paper provided by Claremont Colleges in its series Claremont Colleges Working Papers with number 2001-24.

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Date of creation: Aug 2001
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Handle: RePEc:clm:clmeco:2001-24

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Keywords: alliance; collaboration; integration; joint venture; technological change;

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References

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Cited by:
  1. Rick Harbaugh, 2001. "Equity Stakes and Hold-up Problems," Claremont Colleges Working Papers 2001-31, Claremont Colleges.
  2. Abel Lucena, 2009. "The antecedents and innovation consequences of organizational search: empirical evidence for Spain," Working Papers XREAP2009-08, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2009.

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