Do science and money go together ? The case of French Biotech industry

R. DURAND, O. Bruyaka, V. Mangematin

Strategic Management Journal

December 2008, vol. 29, n°12, pp.1281-1299

Departments: Strategy & Business Policy, GREGHEC (CNRS)

Keywords: rent generation ' rent appropriation ' value drivers ' biotech industry Developing technological applications, entering exploitation alliances, and choosing between research- or service-focused strategic orientations are decisions that high-tech firms must manage concurrently.

This article explores systematically the contrasting effects of these strategic determinants on rent generation and rent appropriation using the entire population of French biotech firms (1994-2002). Findings indicate that science and money do not unconditionally go together-the direct relationship between rent-accruing resources (e.g., patents or articles) and rent appropriation varies depending on the type of resources and the strategic orientation. Moreover, the effects of strategic determinants differ for rent generation vs. rent appropriation: 1) technological application diversity undermines a firm's capacity to appropriate rents-in particular for research-oriented firms; 2) exploitation alliances favor rent generation but hinder rent appropriation; 3) service-oriented firms exhibit significantly better performance than research-oriented firms. Such evidence challenges the emergence in the biotechnology industry of a one-best strategic trajectory, as represented by research-intensive start-ups funded by private money engaged in publishing and patenting races