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First to market: Is technological innovation in new product development profitable in health care industries?

  • Xin, Jenny Y.
  • Yeung, Andy C.L.
  • Cheng, T.C.E.
Registered author(s):

    Do innovative products incorporated advanced technologies help firms improve operating performance? In this study we traced the operating performance of 168 publicly traded manufacturing firms in the USA that announced technologically innovative products in two major industries from the health care domain, namely pharmaceuticals and medical instruments. We employed the event-study methodology and collected objective financial data from Compustat. We found that technologically innovative products have a statistically significant positive effect on operating performance. The median abnormal increase in return-on-assets ranged from 2.20% to 7.07% over a four-year period. The median abnormal increase in return-on-sales ranged from 4.16% to 4.70% and the median abnormal increase in sales-over-assets ranged from 5.85% to 7.38%.

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    File URL: http://www.sciencedirect.com/science/article/B6VF8-5033XSX-2/2/49932b58c09afa987aad7221d95df94f
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    Article provided by Elsevier in its journal International Journal of Production Economics.

    Volume (Year): 127 (2010)
    Issue (Month): 1 (September)
    Pages: 129-135

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    Handle: RePEc:eee:proeco:v:127:y:2010:i:1:p:129-135
    Contact details of provider: Web page: http://www.elsevier.com/locate/ijpe

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