Exploring technology agglomeration patterns for multinational pharmaceutical and biotechnology firms

Authors

  • Mark J Ahn
  • Michael Meeks
  • Sally Davenport
  • Rebecca Bednarek

DOI:

https://doi.org/10.5912/jcb315

Keywords:

agglomeration, cluster, alliance

Abstract

This paper provides an empirical analysis of leading global multinational pharmaceutical and biotechnology firms with respect to technology agglomeration patterns, proximity to alliance partners and firm performance for the period 1996–2006. Our findings suggest that multinational pharmaceutical and biotechnology leaders are converging in terms of their technology agglomeration strategies; and increasingly competing over innovation from small biotechnology companies. Further, our analysis suggests that the absolute number of alliances is more than twice as important compared to proximity to partners in terms of firm performance defined as revenue, profitability and market valuation growth. Thus, for market leaders this study indicates a strategy of relentless pipeline building, with less regard to geographic proximity of alliance partners, appears to enhance relative and absolute performance of biopharmaceutical industry leaders.

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Article