Knowledge Structures And Complementarities In The Pharmaceutical Industry

Date Added: Oct 2009
Format: PDF

This paper investigates how technological distance between firms affects their network of R&D alliances. The theoretic model assumes that the benefit of an alliance between two firms is given by their technological distance. This benefit-distance relationship determines the ego-network of each firm as well as the overall network structure. Empirical relevance is confirmed for the bio-pharmaceutical industry. Although the authors find that the network structure is largely explained by firm size, technological distance determines the positioning of firms in the network.