K. Cool et al., The relative impact of actual and potential rivalry on firm profitability in the pharmaceutical industry, STRAT MANAG, 20(1), 1999, pp. 1-14
This paper estimates the effects of actual and potential rivalry on profita
bility of firms in the U.S. pharmaceutical industry during the 20-year peri
od 1963-82. The results show that during the 1960s actual rivalry among the
sampled firms did not materially affect firm profitability, but that durin
g the 1970s competition among incumbents had an increasingly adverse effect
on their profitability. The results also show that potential competition s
ignificantly reduced drug firms' profitability during the entire 20-year pe
riod. Copyright (C) 1999 John Wiley & Sons, Ltd.