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Partnering among biopharmaceutical companies: toward an explanatory theorethical model Tessa van der Valk (t.vandervalk@geog.uu.nl) Department of Innovation Studies, Utrecht University, the Netherlands. Abstract Companies active in medical biotechnology face great risks because of the high investments required and the rapidity of technological developments in their area of research. In view of this, establishing partnerships is essential for companies active in this sector. This paper focuses on the theoretical background of an explanatory model for partnering among Dutch biopharmaceutical companies. This model encompasses a combination of population, network and technological dynamics. Specific attention is paid to the capabilities and resources of the focal firm and environmental parameters affecting partnering behaviour. The great risks involved make companies inclined to observe their competitors in the course of deciding on their own strategy. In view of this, signals inducing imitation behaviour in strategic choices are also taken into account. 1. Introduction Modern biotechnology is a science-based enabling technology with applications in many different sectors. One of the sectors in which this technology can be applied is pharmaceuticals. In medical biotechnology, technological developments evolve rapidly (Bartholomew, 1997). This creates uncertainty concerning which technological fields companies need to focus on. In view of the rapid developments in this sector, it is not possible for companies to do all of their research and development on their own. Outsourcing of activities can be used to make the overall research and development process more efficient (Buurma et al., 1996). Therefore, firms tend to specialize on their core competences and look for appropriate partners when it comes to activities more distant from these core competences. In the 1970s, technology alliances were not usual in biotechnology.