A knowledge-based theory of the firm: managing innovation in biotechnology

Purpose - Based on the knowledge-based view (KBV), the purpose of this study is to explore the impact of scientific knowledge resources on innovative performance, as well as the mechanisms, in the science-based innovation practice of biotechnological industry. How scientific knowledge influences the firms' innovative performance and how external scientific knowledge flows into the firms efficiently are important issues every high-tech firms must consider. Design/methodology/approach - The authors chose biopharmaceutical firms in China as the sample of this study to empirically test the hypotheses. Findings - The study introduces a framework combining scientific knowledge resources, technological capabilities and innovative performance and, then, follows with an empirical investigation on firms in Chinese biotechnological industry. Survey data from biopharmaceutical firms in China prove the significantly positive impact of both stocks and flows of scientific knowledge on firms' innovative performance, as well as the significant mediation effect, of technological capability. Practical implications - From the results of this study, the authors derive the important managerial implications that talent exchange, purchasing external knowledge directly and establishing R&D alliances are three effective ways leading external scientific knowledge to flow into the firms. Originality/value - The study finds that technological capability plays an intermediary role between scientific knowledge resource and innovative performance; tacit scientific knowledge stock and R&D alliance influence innovative performance through technological capability totally among them.