More Good Things are not Necessarily Better: An Empirical Study of Strategic Alliances, Experience Effects, and Innovative Output in High-Techology Start-ups

We study the relationship between alliance activity and different types of alliances on new product development (NPD). Our sample contains 2,226 alliances in the biotechnology industry, entered into by 325 start-ups over 25 years. The results indicate that the relationship between alliance activity and NPD takes on an inverted U-shaped function. We also find that a firm’s capability to manage alliances increases as uncertainty in the NPD process decreases. Further, there exists a positive experience effect on firm alliance capability.