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Dynamic Economies of Scope in the Pharmaceutical Industry

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  • Kurdas, Chidem

Abstract

Pharmaceutical industry estimates are used to simulate the innovative performance over time of firms with different capabilities. Competitive advantage due to dynamic scope economies is small during the initial exploration of technological trajectories, but subsequently grows. Firms exploring older trajectories have an advantage in product introductions if scope economies are large. Products based on older trajectories retain a cost advantage. These results suggest that incumbents can have a competitive advantage over technological pioneers because of the existence of complementary assets. Copyright 1998 by Oxford University Press.

Suggested Citation

  • Kurdas, Chidem, 1998. "Dynamic Economies of Scope in the Pharmaceutical Industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 7(3), pages 501-521, September.
    • Handle: RePEc:oup:indcch:v:7:y:1998:i:3:p:501-21
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    Cited by:

    1. Jeho Lee, 2003. "Innovation and Strategic Divergence: An Empirical Study of the U.S. Pharmaceutical Industry from 1920 to 1960," Management Science, INFORMS, vol. 49(2), pages 143-159, February.

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