INNOVATIVE PRODUCTIVITY AND RETURNS TO SCALE IN THE PHARMACEUTICAL-INDUSTRY

Authors
GRAVES SB LANGOWITZ NS
Citation
Sb. Graves et Ns. Langowitz, INNOVATIVE PRODUCTIVITY AND RETURNS TO SCALE IN THE PHARMACEUTICAL-INDUSTRY, Strategic management journal, 14(8), 1993, pp. 593-605
Citations number
34
Categorie Soggetti
Management,Business
Journal title
Strategic management journal → ACNP
ISSN journal
01432095
Volume
14
Issue
8
Year of publication
1993
Pages
593 - 605
Database
ISI
SICI code
0143-2095(1993)14:8<593:IPARTS>2.0.ZU;2-P
Abstract
This study shows that firms in the pharmaceutical industry experience decreasing returns to scale in R&D as the level of R&D expenditures ri ses. The paper presents the results of our study of the innovative out put of 16 pharmaceutical firms over a 19 year period. Given the strong correlation between R&D budgets and firm size, our study suggests the wave of mergers in the industry may yield less innovative productivit y than managers expect.