Alliance Network, Information Technology, and Firm Innovation: Findings from Pharmaceutical Industry

This study draws on absorptive capacity theory and organizational learning perspective to examine and elaborate the roles of IT in influencing firm innovation in the alliance network context of pharmaceutical industry. We focused on three types of IT-enabled knowledge capabilities and one specific type of alliance network structure - structural holes - and examine whether and how they interact to jointly affect firm innovation. Firm innovation is observed through pharmaceutical firms’ patent inventions. We collected 82 firm-year observations from 20 unique pharmaceutical companies over the period of 2000-2006. We found that three types of ITenabled knowledge capabilities differentially interact with structural holes to affect pharmaceutical firms’ patent inventions. Our study makes important contributions to theory and practice on IT, interfirm alliance network, and firm innovation.

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