2006 Inaugural Mays Marketing Research Camp Report
Innovation and New Product Management
Friday, April 27 2006
Mays Business School
Texas A&M University
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Shantanu Dutta, Tappan Fellow and Professor of Marketing, University of Southern California, Superior New Product Development: The Interplay between Internal Knowledge Creation and Alliance Activity |
Shantanu Dutta, University of Southern California
Stefan Wuyts, Tilburg University
Seema Pai, University of Southern California
This research study conceptualizes and provides empirical evidence on the roles of both internal knowledge creation and external technological know-how on the development of superior products. The study uses panel data of 700 new product alliances of 52 firms in the pharmaceutical industry. The findings suggest that firms with high alliance diversity should rely on recent internal knowledge and diverse internal knowledge to generate superior new product outcomes. The main implication of this study is that firms should consciously develop internal knowledge based on a diverse array of fields.
The Q&A summary is as follows:
Q. Is there a U-shaped relationship between internal knowledge creation and new product outcomes?
Q. There could be feedback effects from alliances and internal knowledge creation? Does the estimation take into account such possibilities?
A. No, the current model does not take into account such feedback mechanisms. But it is possible that alliances and internal knowledge creation have feedback loops.
Q. How does the ‘Make or Buy’ argument apply to this framework where both internal and external sources of knowledge appear important to new product outcomes
Q. Can you tell if the new product outcomes are superior ex-ante?
A. It is hard to know if the new product outcomes will turn out to be superior.
Q. There could be firm resource type of variable missing in the model? Income, assets?
Q. Isn’t sales expenditure endogenous to the model? How about instruments?
R. It is very difficult to find good instruments in this model.
