The determinants of pharmaceutical research and development expenditures

Henry Grabowski () and John Vernon ()
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Henry Grabowski: Department of Economics, Duke University, Durham, NC 27708, USA
John Vernon: Department of Economics, Duke University, Durham, NC 27708, USA

Journal of Evolutionary Economics, 2000, vol. 10, issue 1, 215 pages

Abstract: Since the late 1970s, pharmaceutical R&D has grown at a rapid rate relative to sales and other variables. In this paper, we examine the determinants of pharmaceutical R&D using a pooled data sample of 11 major drug firms over the period 1974 to 1994. We find that expected returns and cash flows are important explanatory variables of firm research intensities during this period. This is consistent with our results for an earlier sample period characterized by very different growth patterns on R&D.

Keywords: Pharmaceuticals; -; R&D; -; Innovation; -; Cash; flow; -; Expected; returns (search for similar items in EconPapers)
JEL-codes: L65 O31 O33 (search for similar items in EconPapers)
Date: 2000-01-04
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Citations: View citations in EconPapers (47)

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