The proliferation of strategic alliances among firms in the biotechnology industry has led some sociologists to assert that standard models of firm structure must be rethought. Rather than adopting a market or hierarchy, biotech startups illustrate the rise of a new “network” type of governance. Under this form of organization, the boundaries between firms blur and collaborative ties are predicated on norms of exchange and reciprocity. Utilizing data on biotech alliances formed between 1980 and 1992, I critically evaluate these claims by closely examining the details of partnerships. Firm attributes, especially maturity, explain changes in alliance formation over time. Furthermore, I construct a representation of the technological structure of the biopharmaceutical industry to explore the relationship between partnerships and the locations of firms in the knowledge space. I employ quantitative case analyses to understand how firms orient their alliance portfolios to pursue certain strategies of learning and to manage the competitive pressures associated with occupying crowded technological niches. The results suggest that rather than abandoning instrumentality when they enter alliances, biotech firms use their agreements to secure valued resources and to cope with constraints imposed by the institutional environment.
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