Strategic alliances and acquisitions: A comparative analysis of new product development levels and technology cycle times in the global pharmaceutical industry

This analysis has addressed the utility of relying on a contingency-based model to assess the performance outcomes of the external entry mode choices pharmaceutical firms make when innovation appropriation is their goal. Utilizing concepts and variables from transaction cost analysis, relational contracting, resource-based, and strategic behavior theory, the relationship between these predictor variables and the firm's choice of entry strategy was explored. In addition, the performance outcomes of these choices were evaluated within the context of increased innovative output and decreased technology cycle time.;The findings show significant support for the inclusion of such a broad array of theoretical perspectives. In particular, the results indicate support for the inclusion of the transactional variables of uncertainty and asset specificity, the relational contracting variable of repeated interactions, and the resource-based variables of a firm's modal experience and technical expertise in a model predicting entry mode choice. Although this was the first study that attempted to link entry mode choice with innovation characteristics as performance variables, the lack of significance separating the groups on performance means suggests that the model used to predict firm choice may be inappropriate for categorizing firms when innovation is the motive rather than risk reduction or cost minimization.