Technological Diversity and Future Product Diversity in the Drug Industry

Uwe Cantner () and Tatiana Plotnikova

No 2009-031, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: This paper deals with the topic of related R&D and innovation strategies of large firms. We ask what determines the diversity of a firm's product portfolio. More specifically, we try to explain large firms' expansion into new product markets driven by the characteristics of their technological knowledge. Empirically, we study firms in the pharmaceutical and biotech industries, using relevant data on product development and technological knowledge. We find a positive relationship between the diversity of a firm's future product portfolio and the diversity of its stock of technological knowledge. This relationship becomes weaker when the breadth of technological knowledge increases.

Keywords: Product diversity; technological diversity; product relatedness; technological relatedness; coherence (search for similar items in EconPapers)
JEL-codes: L25 L65 O32 (search for similar items in EconPapers)
Date: 2009-05-05
New Economics Papers: this item is included in nep-cse, nep-ino, nep-mic and nep-tid
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2009-031

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