This dissertation attempts to contribute to our understanding of the antecedents to dynamic capability formation by exploring the interaction between the internal and external mechanisms firms employ to develop these capabilities. Each of the three chapters highlights the importance of not only considering the heterogeneity of a firm's intellectual capital but also the interaction between this resource and the other mechanisms firms can utilize; including spending on research and development, undertaking acquisitions, and forming strategic alliances.

Chapter 1 of the dissertation serves to introduce and synthesize the major themes and contributions of my dissertation. In Chapter 2, I develop a multi-level framework of dynamic capabilities formation. By analyzing the role individuals play in a firm's ongoing innovation efforts, I illustrate not only the process through which dynamic capabilities are formed but also how they relate to a firm's strategy-making process. In particular, I suggest that there are three stages in the process of dynamic capabilities formation, through which the firm identifies, acquires, codifies, and eventually commercializes new knowledge. My analysis highlights the role key employees play in moderating the effectiveness of the developed capabilities and the role average employees play in mediating their existence.

In Chapter 3 of my dissertation I turn to empirically examine, more generally, the importance of not only considering the heterogeneity of the intellectual human capital, developed in chapter 2, but also the other mechanisms firms employ to access and assimilate knowledge that resides outside of the firm. Following the dynamic capabilities perspective, I suggest that antecedents to innovation can be found at the individual, firm, and network level. Accordingly, I advance a set of hypotheses to assess the effect of individual, firm, and network-level antecedents on innovation output. I then investigate whether a firm's antecedents to innovation lie across different levels. To accomplish this, I propose two competing hypotheses. I juxtapose the propositions that the individual, firm, and network-level antecedents to innovation are substitutes versus complements.

The fourth chapter of my dissertation examines several of the interesting findings of Chapter 3 in more detail, through the lens of a specific dynamic capability, ambidexterity. To this end, I develop and empirically test a contingency framework of ambidexterity across exploration and exploitation activities. While an explorationexploitation lens has been applied to strategic alliances based on their strategic motivation, I propose that it can also be applied to a firm's intellectual human capital based on a bifurcation of “star” versus “staff scientists.” Following a dynamic capabilities perspective, I suggest that antecedents to building these capabilities within the same activity (either indented for exploration or exploitation) compensate for one another, and thus are substitutes. Conversely, I hypothesize that different dynamic capability antecedents across exploration or exploitation activities positively reinforcing one another, and thus are complements. To empirically investigate the relationship between different antecedents to dynamic capabilities, I focus on the pharmaceutical firms' adaptation to biotechnology over a 30-year time period, 1974-2003. In general, I find support for the notion that building capabilities within the same activity compensate for on another, while ambidexterity across exploration and exploitation enhances a firm's innovative performance. Finally, my dissertation concludes with Chapter 5, which again summarizes the major themes and contributions of my dissertation. In addition, I offer some limitations of the current study as well as areas of interest for future consideration. The data utilized in the dissertation is an unusually comprehensive and detailed panel dataset that documents the innovation attempts of global pharmaceutical companies within the new biotechnology paradigm over a 23-year time period. In general, my extensive data collection process has produced fine-grained, longitudinal data on over 3,100 alliances, 3,500 new drug introductions, 36,000 biotechnology patents that have been cited 80,000 times, 147,000 non-biotechnology patents, 171,000 publishing scientists, 672,000 journal publications, and 9.9 million journal citations.