Publications

Journal Article

This paper examines the adjustments firms make to the composition of their portfolios of technology-sourcing vehicles (i.e., alliance, acquisition, or go-it-alone) in response to poor innovative performance.

The authors advance a behavioral perspective on the make/buy/ally question, suggesting that differences in financial slack will generate different portfolio decisions.

Specifically, the authors posit that firms with greater levels of financial slack are more likely to respond to poor innovative performance by opting for (1) greater vehicle diversification, and (2) new sourcing vehicles, while firms with less financial slack will respond by (1) downscoping their portfolio of sourcing vehicles, and (2) reverting to more familiar vehicles.

The authors find support for our predictions using extensive data from the population of U.S. public pharmaceutical firms from 1992 to 2006.