EVALUATING TECHNOLOGICAL INFORMATION AND UTILIZING IT - SCIENTIFIC KNOWLEDGE, TECHNOLOGICAL CAPABILITY, AND EXTERNAL LINKAGES IN BIOTECHNOLOGY

Recent research in the theory of innovation has suggested that the role of collaborative alliances in the innovation process has become very important. In this paper we argue that firms differ significantly in their ability to benefit from these collaborative relationships. We relate the internal knowledge base of the firm to the number of collaborative agreements (external linkages) that it enters into with other agents (small start-up biotechnology firms, and universities) endowed with complementary assets for innovation. We distinguish between scientific and technological capabilities, the former relating to the evaluation of information, and the latter to the utilization. We test the implications of the model using data on a sample of 26 large U.S. chemical and pharmaceutical companies active in the biotechnology sector in the 1980s using econometric techniques appropriate for count events.