Faculty of Economics and Business Administration Publications Database

Buffering the failure of new product development projects: A multi-level approach

Bürger, Robin
Patzelt, Holger
Abstract: We develop a multi-level model of the impact of new product development (NPD) failures on firm valuation based on organizational, managerial, and product-level characteristics of high technology firms. Drawing on signalling theory we argue that the impact of failure increases with the product’s development stage, and that this effect is contingent on the resources of the firm. Using data on 234 NPD failures of biopharmaceutical firms listed on the NASDAQ Biotechnology index, the findings largely support our model and demonstrate that organizational and managerial characteristics are important factors that mitigate the impact of NPD failures in new technology firms. We discuss implications for the product development literature.
Year: 2009
Link External Source: Online Version
Book Title: Frontiers of Entrepreneurship Research 2009
Editor: Bygrave, W.D. et al.
Volume: 29
Pages: Article 2