Effects of competition on governance choice and project performance: evidence from clinical trials in the biotechnology industry.

Abstract

In this dissertation, I incorporate the external competitive environment into the analysis of governance choice of technology projects and performance implications of such governance choice. From the perspective of R&D firms, I develop a theoretical framework that categorizes competitors in a technology domain into two groups R&D firms and vertically integrated firms. Furthermore, I identify the underlying mechanisms that drive the relationship between the presence of heterogeneous competitors and a R&D firm's choice of three alternative governance modes: internal organization, equity alliance and non-equity alliance. I test the framework on a unique data set that contains history of clinical trials in 24 therapeutic areas in the US biotechnology industry between 1996 to 2008.