The double-edged sword of technological diversity in R&D alliances: Network position and learning speed as moderators

Research on alliances has recognized the bright and dark sides of technological diversity between alliance partners. We extend this line of research by offering a model that examines how network centrality and learning speed shape the relationship between technological diversity and market performance. We tested the model by using a large sample of 769 firm-year observations from U.S. biotech, pharmaceutical, and medical device industries, spanning the period from 1990 to 2006. The results reveal that the degree of technological diversity between alliance partners exhibits an inverted U-shaped relationship with firm performance. In addition, this relationship is positively moderated by network centrality and learning speed.