Reputation, Self-Efficacy, and Alliance Formation between Biotechnology Companies and Pharmaceutical Firms

We examine the decision criteria firms use when assessing newly created companies as potential partners. We expect the academic credentials of the founding chief scientists to increase the likelihood of forming alliances with firms early in the commercialization process of the product for which the alliance was formed, yet predict this effect to weaken as the company grows. An analysis of 325 pharmaceutical-biotechnology alliances shows that company size not only weakens the credentials effect, it reverses it.