The source of comparative advantage in the biotechnology industry: A real options approach

Brian F. Lavoie and Ian Sheldon
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Brian F. Lavoie: Department of Agricultural, Environmental and Development Economics, The Ohio State University, 2120 Fyffe Road, Columbus, OH 43210, Postal: Department of Agricultural, Environmental and Development Economics, The Ohio State University, 2120 Fyffe Road, Columbus, OH 43210

Agribusiness, 2000, vol. 16, issue 1, 56-67

Abstract: Sources of heterogeneity within the process of research and development (R&D) investment, such as international differences in the maximum per-period rate of investment and level of regulatory uncertainty, offer a plausible explanation for US comparative advantage in biotechnology. Using dynamic stochastic simulation, the results presented in this article suggest US biotechnology firms may initiate more R&D projects, innovate earlier and more rapidly, persevere longer in the face of mounting R&D costs, and successfully complete more R&D projects than European firms [Econ-Lit citations: F100, O310, O330]. © 2000 John Wiley & Sons, Inc.

Date: 2000
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Related works:
Working Paper: THE SOURCE OF COMPARATIVE ADVANTAGE IN THE BIOTECHNOLOGY INDUSTRY: A REAL OPTIONS APPROACH (2000)
Working Paper: THE SOURCE OF COMPARATIVE ADVANTAGE IN THE BIOTECHNOLOGY INDUSTRY: A REAL OPTIONS APPROACH (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:16:y:2000:i:1:p:56-67

DOI: 10.1002/(SICI)1520-6297(200024)16:1<56::AID-AGR5>3.0.CO;2-S

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