Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery

Rebecca Henderson and Iain Cockburn

RAND Journal of Economics, 1996, vol. 27, issue 1, 32-59

Abstract: We examine the relationship between firm size and research productivity in the pharmaceutical industry. Using detailed internal firm data, we find that larger research efforts are more productive, not only because they enjoy economies of scale, but also because they realize economies of scope by sustaining diverse portfolios of research projects that capture internal and external knowledge spillovers. In pharmaceuticals, economies of scope in research are important in shaping the boundaries of the firm, and it may be worth tolerating the static efficiency loss attributable to the market power of large firms in exchange for their superior innovative performance.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (456)

Downloads: (external link)
http://links.jstor.org/sici?sici=0741-6261%2819962 ... O%3B2-U&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
Working Paper: Scale, Scope and Spillovers: The Determinants of Research Productivity in Drug Discovery
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rje:randje:v:27:y:1996:i:spring:p:32-59

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().