Scale, Scope and Spillovers: The Determinants of Research Productivity in the Pharmaceutical Industry / Rebecca Henderson, Iain Cockburn.

Format:

Book

Author/Creator:

Henderson, Rebecca.

Contributor:

National Bureau of Economic Research.

Cockburn, Iain.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4466.

NBER working paper series no. w4466

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Scale, Scope and Spillovers

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1993.

Summary:

This paper presents the results of a study of the determinants of research productivity in the pharmaceutical industry. Using disaggregated, internal firm data at the research program level from ten major pharmaceutical companies, we find no evidence of increasing returns to scale at either the firm or the research program level. However our results suggest that there are three benefits to running research programs within the context of larger and more diversified R&D efforts: economies of scale arising from sharing fixed costs; economies of scope arising from the opportunity to exploit knowledge across program boundaries within the firm; and the enhanced ability to absorb internal and external spillovers. We also find that spillovers between firms may playa major role in increasing research productivity. The paper also speaks directly to the question of firm heterogeneity. A significant proportion of the "firm effect" identified in previous studies can be explained by the slowly changing composition of the research portfolio, as well as by less easily measured aspects of innovative capability.

Notes:

Print version record

September 1993.