Aspirations, performance, and change in partnering behavior: Evidence from the pharmaceutical industry 1900-2006

Building on the prior research on aspiration levels, managerial decision making and partnering routines, we examine the conditions under which pharmaceutical firms change their partnering behavior across time. Using insights drawn from behavioral theory and evolutionary theory of the firm, we suggest that any change in partnering behavior is considered risky, and is triggered by the gap between actual performance (financial and innovative) and aspirational performance (developed on the basis of historical and social comparisons). Testing a sample of 988 pharmaceutical firms from 1990 to 2006, our results suggest that the change partnering behavior depends on the performance type: firms are more likely to change when financial performance equals aspiration, while innovative performance predicts opposite results on the performance discrepancy (both below and above)- change in partnering behavior relationship.