Come Close and Co-create: Proximities in Pharmaceutical Innovation Networks

In studying firm behavior, economists tend to have an under-socialized view of the firm, while sociologists tend to have an over-socialized view of the firm. Socialization in this respect refers to the extent to which a firm is embedded in- and affected by its relational environment. On the one extreme, economists building on transaction costs economics assume the market to be an anonymous environment where firms can behave opportunistically without repercussions. On the other extreme, sociologists argue that the market consists of a dense web of existing and previous transactions in which a firm is embedded, and that this embeddedness is defining the range of strategies a firm can pursue or even perceive1. While the former view mainly considers the impact of behavior on a static environment and the latter focuses on the impact of environment on firm behavior, this thesis provides a co-evolutionary perspective, wherein firm behavior and environmental structures affect each other mutually. This dynamic perspective on innovation strategies of firms allows us to take into accounts both ongoing and previous transactions, which together constitutes a firm’s relational environment. We study how firm behavior is affected by its network position and how network structures change as a result of firm behavior. We shall focus on the biopharmaceutical industry. Besides the network of collaborations, the environment in which a typical biopharmaceutical firm operates consists of a number of other elements as depicted in figure 1.1. This figure shows the main environmental elements to which a firm in the pharmaceutical industry is subject to.

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