The Effect of General and Partner-Specific Alliance Experience on Joint R&D Project Performance

Drawing on the organizational learning literature, we study the effect of alliance experience on alliance performance. We differentiate between firm-level general alliance experience obtained from alliances across a diverse set of partners and dyad-level partner-specific alliance experience accumulated through repeated interactions with the same partner. We posit that general and partner-specific alliance experience contribute to alliance performance but at a declining rate. We test our hypotheses using a unique dataset that captures objective alliance performance at the project level between large pharmaceutical firms that are attempting to leverage the new biotechnology, and their partner organizations. We find that the general alliance experience of the biotechnology partner, but not the pharmaceutical firm, has a positive effect on joint project level performance. This relationship appears to exhibit diminishing marginal returns. Contrary to predictions, we find a negative, marginally significant effect of partner-specific experience on joint project-level performance.