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Technological Diversity and Future Product Diversity in the Drug Industry

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Author Info

  • Uwe Cantner

    ()
    (Friedrich-Schiller-University, Jena, Department of Economics, Chair of Economics)

  • Tatiana Plotnikova

    ()
    (Friedrich-Schiller-University, Jena, GSBC-EIC The Economics of Innovative Change)

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.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-031.

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Date of creation: 05 May 2009
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Handle: RePEc:jrp:jrpwrp:2009-031

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Related research

Keywords: Product diversity; technological diversity; product relatedness; technological relatedness; coherence;

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Cited by:
  1. Thomas Bolli & Martin W├Ârter, 2013. "Technological Diversification and Innovation Performance," KOF Working papers 13-336, KOF Swiss Economic Institute, ETH Zurich.

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