Determinants of Pharmaceutical Innovation: The Role of Technological Opportunities Revisited
AbstractRecent empirical contributions emphasize the importance of (potential) market size for the development of new pharmaceuticals. At the same time many scholars point out the importance of of scientific advances for the industry's R&D activities. Against this background I analyze the relationship between (potential) market size, technological opportunities, and the number of new pharmaceuticals in the United States. Technological opportunities are operationalized as growth rates of the relevant knowledge stock as proposed by Andersen (1999, 1998). I analyze a unique dataset by using an "entry stock" Poisson quasi-maximum likelihood estimator. The results reveal a rather robust and significantly positive response of the number of new pharmaceuticals, i.e., new molecular entities or new drug approvals, to market size and technological opportunities.
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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 2012-018.
Date of creation: 03 May 2012
Date of revision:
Determinants of Innovation; Pharmaceuticals; Demand; Technological Opportunities;
Other versions of this item:
- Bastian Rake, 2013. "Determinants of Pharmaceutical Innovation: The Role of Technological Opportunities Revisited," DRUID Working Papers 13-03, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- J10 - Labor and Demographic Economics - - Demographic Economics - - - General
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-08 (All new papers)
- NEP-CSE-2012-05-08 (Economics of Strategic Management)
- NEP-HEA-2012-05-08 (Health Economics)
- NEP-INO-2012-05-08 (Innovation)
- NEP-SBM-2012-05-08 (Small Business Management)
- NEP-TID-2012-05-08 (Technology & Industrial Dynamics)
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