Correspondence: Mark J. Ahn, Victoria Management School, Victoria University of Wellington, Rutherford House, 23 Lampton Key, Wellington 6140, New Zealand. E-mail: mark@pukanapartners.com

¹is Professor and Chair, Science & Technology Entrepreneurship at Victoria University of Wellington; and Principal at Pukana Partners, Ltd. which provides strategic consulting to life science companies. Dr Ahn's teaching and research interests include global strategy and innovation management; biotechnology and life science industries; leadership and transformational change; and social responsibility and venture philanthropy.

²is Assistant Professor of Strategic Management and Entrepreneurship at San Francisco State University. He is the founding director of SFSU's Family Enterprise Center.

³is Professor and Associate Dean (Graduate Studies and Research), Faculty Commerce and Administration at Victoria University of Wellington.

⁴is a PhD candidate at Victoria University of Wellington.

Received 18 February 2009; Revised 18 February 2009; Published online 7 April 2009.

Abstract

This paper provides an empirical analysis of leading global multinational pharmaceutical and biotechnology firms with respect to technology agglomeration patterns, proximity to alliance partners and firm performance for the period 1996–2006. Our findings suggest that multinational pharmaceutical and biotechnology leaders are converging in terms of their technology agglomeration strategies; and increasingly competing over innovation from small biotechnology companies. Further, our analysis suggests that the absolute number of alliances is more than twice as important compared to proximity to partners in terms of firm performance defined as revenue, profitability and market valuation growth. Thus, for market leaders this study indicates a strategy of relentless pipeline building, with less regard to geographic proximity of alliance partners, appears to enhance relative and absolute performance of biopharmaceutical industry leaders.