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Corporate Governance and the Governance of Innovation: the Case of Pharmaceutical Industry

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Author Info
Nicola Lacetera () (CESPRI, Universita' Bocconi, Milano, Italy)

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Abstract

The paper focuses on some organizational dynamics that have characterized pharmaceutical industry in the last thirty years, when biotechnology and the development of life sciences have defined a new technological paradigm, reshaping many aspects of the industry, especially the organization of innovative activity. We suggest an original interpretation of some organizational settings, as the increased importance of skilled scientists within firms and the development of inter-organizational alliances for the division of scientific labor. Following recent theorizing on corporate governance issues, which points out the intrinsic organizational and relational dimensions of the resource allocation processes or strategic decision-making, we propose a role of the organizational practices mentioned above on corporate governance, and, in turn, an influence of different governance arrangements on innovative activity. We recall more traditional approaches to the analysis of corporate governance, and give a broader interpretation to the relevant variables proposed. Further, relying on more recent theories and on literature on firm's boundaries and sectoral systems of innovation, we propose industry-specific variables for pharmaceuticals, including internal settings as well as relations with external actors. Preliminary empirical support is given to our hypotheses, concerning a panel of large US pharmaceutical companies.

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Publisher Info
Paper provided by CESPRI, Centre for Research on Innovation and Internationalisation, Universita' Bocconi, Milano, Italy in its series CESPRI Working Papers with number 122.

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Length: 39 pages
Date of creation: Dec 2000
Date of revision: Dec 2000
Handle: RePEc:cri:cespri:wp122

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Related research
Keywords: Corporate governance Firm's boundaries Innovation Pharmaceutical industry Research agreements Research organization Technological change

Find related papers by JEL classification:
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D

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References listed on IDEAS
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