Dual market structures and the likelihood of repeated ties – evidence from pharmaceutical biotechnology

Abstract

This paper analyses the role of repeated ties in the high-tech pharmaceutical biotechnology industry, a sector that is characterized by a strong dual market structure. Our most important finding is that previous ties in pairs of large pharmaceutical companies and small biotechnology firms have a negative effect on their subsequent partnering. An explanation for this result is found in the context of understanding the specifics of large-small coalitions in a high-tech dual market structure. Unlike what is known about repeated ties in many other industries, this high-tech dual market structure indicates that R&D partnerships between a small number of very large companies and a large group of dependent, small firms are not characterized by mutual dependence, similarity, or equality.