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Coherence of the Knowledge Base and the Firms’ Innovative Performance. Evidence from the Bio-Pharmaceutical Industry

Author

Listed:
  • Lionel Nesta

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Pier Paolo Saviotti

    (GAEL - Laboratoire d'Economie Appliquée = Grenoble Applied Economics Laboratory - UPMF - Université Pierre Mendès France - Grenoble 2 - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique)

Abstract

We examine the relationship between the coherence of the knowledge base and the innovative performance of U.S. pharmaceutical firms during the 1990's. We develop measures of the coherence and scope of the firms' knowledge base. Count data regression models show a strong link between these two properties and the firms' innovative performance. Firms experience decreasing returns to scale in research but larger firms enjoy a significant size advantage in innovation. Knowledge flows are necessary in knowledge production but not sufficient to secure its quality. Over time, the contribution of the scope and coherence of the knowledge base is increasing.

Suggested Citation

  • Lionel Nesta & Pier Paolo Saviotti, 2005. "Coherence of the Knowledge Base and the Firms’ Innovative Performance. Evidence from the Bio-Pharmaceutical Industry," SciencePo Working papers Main hal-03417696, HAL.
    • Handle: RePEc:hal:spmain:hal-03417696
    DOI: 10.1111/j.0022-1821.2005.00248.x
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