ALLIANCE PORTFOLIO DIVERSITY AND FIRM EXPLORATORY INNOVATION: ABSORPTIVE CAPACITY’S ROLE

In technology-intensive industries, alliance portfolio diversity (APD) offers firms access to heterogeneous knowledge for innovation, yet its effects remain inconsistent in prior research. Drawing on organisational learning theory, this study addresses this inconsistency by uncovering a fundamental asymmetry in the APD–innovation relationship. The results of this longitudinal analysis of a panel data set of 43 U.S. biopharmaceutical firms indicate that APD is positively associated with exploratory innovation but negatively related to exploitative innovation. Building on this core asymmetry, the study further investigates how absorptive capacity dimensions, exploratory and transformative learning, moderate the relationship between APD and innovation outcomes. Furthermore, while exploration intensity does not moderate this relationship, higher knowledge diversity and R&D intensity strengthen the positive effect of APD on exploratory innovation, and knowledge diversity also enhances exploitative output. The study contributes to the collaborative innovation literature by clarifying that the value of APD depends on both the type of innovation pursued and the firm’s internal capacity to absorb and transform external knowledge.