Owing to the significant change in the business environment, strategic alliance has become an increasingly popular way in response to the ever changing environments featured by shorter product life cycle and fiercer competition. Drawing on the resource-based view and institutional theory, this study aims to explore under what conditions a biotech start-up is able to deliver an effective signal to the investment community so as to yield a better IPO (Initial Public Offering) performance. In the sample of 283 alliances involving biotech firms with other identities of organizations, the results show that allying with different identities of partners, namely, pharmaceutical firms or prestigious academic institutions, significantly influences a young biotech firmís IPO performance. Furthermore, the study shows that the IPO performance of partner identity is subject to firm capabilities and market conditions. The study contributes to the strategy literature by shedding light on the endorsement effects of legitimate partners.
JEL classification numbers: L14, M10, M19
Keywords: Partner Selection, IPO Performance, Strategic Alliance
ISSN: 1792-7552 (Online)