Scale, Scope and Spillovers: The Determinants of Research Productivity in the Pharmaceutical Industry
Rebecca Henderson and
Iain Cockburn ()
No 4466, NBER Working Papers from National Bureau of Economic Research, Inc
This paper presents the results of a study of the determinants of research productivity in the pharmaceutical industry. Using disaggregated, internal firm data at the research program level from ten major pharmaceutical companies, we find no evidence of increasing returns to scale at either the firm or the research program level. However our results suggest that there are three benefits to running research programs within the context of larger and more diversified R&D efforts: economies of scale arising from sharing fixed costs; economies of scope arising from the opportunity to exploit knowledge across program boundaries within the firm; and the enhanced ability to absorb internal and external spillovers. We also find that spillovers between firms may playa major role in increasing research productivity. The paper also speaks directly to the question of firm heterogeneity. A significant proportion of the "firm effect" identified in previous studies can be explained by the slowly changing composition of the research portfolio, as well as by less easily measured aspects of innovative capability.
JEL-codes: O3 L65 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Published as Rand Journal of Economics, Spring 1996, 27(1), pp.32-59.
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:4466
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().