First to market: Is technological innovation in new product development profitable in health care industries?
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%.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Teece, David J., 1986.
"Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy,"
Elsevier, vol. 15(6), pages 285-305, December.
- Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
- Kevin B. Hendricks & Vinod R. Singhal, 2008. "The Effect of Product Introduction Delays on Operating Performance," Management Science, INFORMS, vol. 54(5), pages 878-892, May.
- Loof, Hans & Heshmati, Almas, 2002.
"Knowledge capital and performance heterogeneity: : A firm-level innovation study,"
International Journal of Production Economics,
Elsevier, vol. 76(1), pages 61-85, March.
- Lööf, Hans & Heshmati, Almas, 2000. "Knowledge Capital and Performance Heterogeneity: A Firm Level Innovation Study," SSE/EFI Working Paper Series in Economics and Finance 387, Stockholm School of Economics, revised 14 Aug 2000.
- Chaney, Paul K & Devinney, Timothy M & Winer, Russell S, 1991. "The Impact of New Product Introductions on the Market Value of Firms," The Journal of Business, University of Chicago Press, vol. 64(4), pages 573-610, October.
- Blundell, Richard & Griffith, Rachel & van Reenen, John, 1999. "Market Share, Market Value and Innovation in a Panel of British Manufacturing Firms," Review of Economic Studies, Wiley Blackwell, vol. 66(3), pages 529-54, July.
- O'Brien, C. & Smith, S. J. E., 1995. "Strategies for encouraging and managing technological innovation," International Journal of Production Economics, Elsevier, vol. 41(1-3), pages 303-310, October.
- Lo, Chris K.Y. & Yeung, Andy C.L. & Cheng, T.C.E., 2009. "ISO 9000 and supply chain efficiency: Empirical evidence on inventory and account receivable days," International Journal of Production Economics, Elsevier, vol. 118(2), pages 367-374, April.
- Chan, Su Han & Martin, John D. & Kensinger, John W., 1990. "Corporate research and development expenditures and share value," Journal of Financial Economics, Elsevier, vol. 26(2), pages 255-276, August.
- Warren, Matthew P. & Forrester, Paul L. & Hassard, John S. & Cotton, John W., 2000. "Technological innovation antecedents in the UK ceramics industry," International Journal of Production Economics, Elsevier, vol. 65(1), pages 85-98, April.
- Koufteros, Xenophon & Marcoulides, George A., 2006. "Product development practices and performance: A structural equation modeling-based multi-group analysis," International Journal of Production Economics, Elsevier, vol. 103(1), pages 286-307, September.
- Guenther, David A. & Rosman, Andrew J., 1994. "Differences between COMPUSTAT and CRSP SIC codes and related effects on research," Journal of Accounting and Economics, Elsevier, vol. 18(1), pages 115-128, July.
- Gupta, Abhishek & Pawar, Kulwant S. & Smart, Palie, 2007. "New product development in the pharmaceutical and telecommunication industries: A comparative study," International Journal of Production Economics, Elsevier, vol. 106(1), pages 41-60, March.
- Valle, Sandra & Vázquez-Bustelo, Daniel, 2009. "Concurrent engineering performance: Incremental versus radical innovation," International Journal of Production Economics, Elsevier, vol. 119(1), pages 136-148, May.
- McGuire, Stephen J. & Dilts, David M., 2008. "The financial impact of standard stringency: An event study of successive generations of the ISO 9000 standard," International Journal of Production Economics, Elsevier, vol. 113(1), pages 3-22, May.
- Pedroso, Marcelo Caldeira & Nakano, Davi, 2009. "Knowledge and information flows in supply chains: A study on pharmaceutical companies," International Journal of Production Economics, Elsevier, vol. 122(1), pages 376-384, November.
- Afonso, Paulo & Nunes, Manuel & Paisana, António & Braga, Ana, 2008. "The influence of time-to-market and target costing in the new product development success," International Journal of Production Economics, Elsevier, vol. 115(2), pages 559-568, October.
- Edward B. Roberts & Oscar Hauptman, 1987. "The Financing Threshold Effect on Success and Failure of Biomedical and Pharmaceutical Start-Ups," Management Science, INFORMS, vol. 33(3), pages 381-394, March.
- William C. Bogner & Pratima Bansal, 2007. "Knowledge Management as the Basis of Sustained High Performance," Journal of Management Studies, Wiley Blackwell, vol. 44(1), pages 165-188, 01.
When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:127:y:2010:i:1:p:129-135. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.