INNOVATION, RESEARCH-AND-DEVELOPMENT PRODUCTIVITY, AND GLOBAL MARKET SHARE IN THE PHARMACEUTICAL-INDUSTRY

In this paper, we estimate two empirical models using a pooled, cross- section sample of international pharmaceutical firms for the period 19 87 to 1989. The first model tests the relationship between R and D pro ductivity and a vector of firm-specific characteristics. The second mo del tests the determinants of global market share. The empirical analy sis reveals three findings. First, we find evidence that there are dim inishing returns in the pharmaceutical R and D process. Second, we fin d that firm size has a positive effect on average R and D productivity and a positive impact on the marginal R and D productivity for plausi ble R and D staff sizes. Acid third, we find evidence that R and D pro ductivity and the number of sales employees have a positive effect on the firm's global market share.