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Firm Value and Geographic Competitive Advantage: Evidence from the U.S. Pharmaceutical Industry


  • Vigdis Boasson

    (Ithaca College)

  • Alan MacPherson

    (State University of New York at Buffalo)

  • Hyun-Han Shin

    (Yonsei University, Seoul, Korea)


This paper examines the effects of geographic sources of competitive advantage on firm value among publicly traded pharmaceutical companies in the United States. A central argument is that firm value responds positively to geographic factors. We hypothesize that firm value is influenced by the degree of industry clustering, university and industrial R&D spending, the presence of related or supporting industries, and the proximity of competitors. The empirical results lend support to our hypotheses. Even after controlling for the firm value determinants used by Fama and French (1998), geographic variables explain a significant part of the cross-sectional variation in firm value.

Suggested Citation

  • Vigdis Boasson & Alan MacPherson & Hyun-Han Shin, 2005. "Firm Value and Geographic Competitive Advantage: Evidence from the U.S. Pharmaceutical Industry," The Journal of Business, University of Chicago Press, vol. 78(6), pages 2465-2495, November.
  • Handle: RePEc:ucp:jnlbus:v:78:y:2005:i:6:p:2465-2464

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    References listed on IDEAS

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    Cited by:

    1. J. Knoben, 2009. "Localized inter-organizational linkages, agglomeration effects, and the innovative performance of firms," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(3), pages 757-779, September.
    2. Fernhaber, Stephanie A. & Li, Dan, 2013. "International exposure through network relationships: Implications for new venture internationalization," Journal of Business Venturing, Elsevier, vol. 28(2), pages 316-334.

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