Partnering strategies in technology licensing agreements : evidence from Biotechnology

The core idea of this paper is that prior alliances can be used to identify attractive acquisition targets. It differs from prior work that models acquisition and alliances as essentially options and suggests that both mechanisms have to be considered related and, thus, worthy of being studied collectively. Accordingly, we ask: Under what conditions do alliance partners become attractive acquisition targets? To test our hypotheses, we selected a sample of 316 biotech firms, involved in 2,359 licensing agreements and 77 acquisitions, spanning a period of 15 years. We found that previous alliances between the target and the acquiring firm is not significant, while targeting firms with a large patent portfolio, and firms possessing relational resources, proxied by the centrality within their alliance partners network is relevan