Technological Diversity and Future Product Diversity in the Drug Industry
AbstractThis 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.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-031.
Date of creation: 05 May 2009
Date of revision:
Product diversity; technological diversity; product relatedness; technological relatedness; coherence;
Find related papers by JEL classification:
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-16 (All new papers)
- NEP-CSE-2009-05-16 (Economics of Strategic Management)
- NEP-INO-2009-05-16 (Innovation)
- NEP-MIC-2009-05-16 (Microeconomics)
- NEP-TID-2009-05-16 (Technology & Industrial Dynamics)
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- Thomas Bolli & Martin Wörter, 2013. "Technological Diversification and Innovation Performance," KOF Working papers 13-336, KOF Swiss Economic Institute, ETH Zurich.
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