Technology, Cooperation And Stock Market Value: An Event Study Of New Partnership Announcements In The Biotechnology And Pharmaceutical Industries

Sandy Campart () and Etienne Pfister ()
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Sandy Campart: CERENE - Centre d'Etude et de Recherche en économiE et gestioN LogistiquE - ULH - Université Le Havre Normandie - NU - Normandie Université
Etienne Pfister: BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique

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Abstract: We use the event study methodology to investigate the share price responses to the formation of 281 partnerships inthe biotechnology/pharmaceutical industry over the years 1995–2000. The average stock price response is positive,more so than in previous empirical works, which could be interpreted as evidence that interfirm collaboration isparticularly valuable in high-technology industries. Research and development (R&D) partnerships also generatehigher abnormal returns (relative to production or marketing agreements). On average, smaller firms in the partnershipseem to appropriate a very significant share of the cooperative surplus, especially when they receive large technologypayments or when the partnership is concluded in the R&D stage. On the other hand, partnership announcements ofmore profitable firms tend to be associated with higher abnormal returns.

Keywords: Interfirm cooperation; Event study; Pharmaceutical industry (search for similar items in EconPapers)
Date: 2007
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Published in Economics of Innovation and New Technology, 2007, 16 (1), pp.31-49. ⟨10.1080/10438590600661764⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00337305

DOI: 10.1080/10438590600661764

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