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Alliances and Survival of New Biopharmaceutical Ventures in the Wake of the Global Financial Crisis

Published on Apr 1, 2019in Journal of Small Business Management
· DOI :10.1111/jsbm.12331
Tianjiao Xia5
Estimated H-index: 5
(Lboro: Loughborough University),
Dimo Dimov27
Estimated H-index: 27
Abstract
Engaging in exploration and exploitation is essential to business survival and performance. While firms manage exploration and exploitation alliances for the long-term, how prepared are they for sudden shocks in the short-term? We address this question in the context of a unique and opportune natural experiment associated with the 2008 financial crisis. Our analysis of 155 new biopharmaceutical ventures over a seven-year period suggests that exploration alliances – with a long-term orientation – make a firm more vulnerable to external shocks. In contrast, exploitation alliances as well as a balance between exploration and exploitation alliances – which underlie short-term performance – enable the firm to sustain external shocks.
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