Exploration-Exploitation Motivations: An Investigation of Biotechnology Firms’ Participation in Academic Consulting

Abstract

We employ the exploration-exploitation framework to examine how firm-level motivations influence a biotechnology firm’s participation in consulting agreements with university scientists. This study presents hypotheses that explore whether biotechnology firms use consulting agreements as vehicles to explore new knowledge to develop their absorptive capacity and initiate a relationship with a scientist’s university or to exploit their entrepreneurial orientation or formal technology transfer experience. Assessing survey data collected from biotechnology firms, our analysis revealed significant and positive associations for exploration motives; however, the findings were mixed for exploitation motives. The discussion offers theoretical and managerial implications and future research areas.