IDEAS home Printed from https://ideas.repec.org/p/hub/wpecon/201012.html
   My bibliography  Save this paper

Internal Basic Research, External Basic Research and the Technological Performance of Pharmaceutical Firms

Author

Listed:
  • Leten, Bart

    (Hogeschool-Universiteit Brussel (HUB), Belgium)

  • Kelchtermans, Stijn

    () (Hogeschool-Universiteit Brussel (HUB), Belgium)

  • Belderbos, Ren

    (UNU-MERIT ,The Netherlands; Maastricht University, The Netherlands)

Abstract

We evaluate the impact of basic research on pharmaceutical firms technological performance, distinguishing between internal basic research and the exploitation of external basic research findings. We find that firms increase their performance by engaging more in internal basic research, in particular if basic research is conducted in collaboration with university scientists. The exploitation of external basic research improves performance, while the magnitude increases with firms involvement in internal basic research. Hence, internal basic research and the exploitation of external basic research are complements, suggesting that internal basic research provides firms with the skills to exploit external basic research more effectively.

Suggested Citation

  • Leten, Bart & Kelchtermans, Stijn & Belderbos, Ren, 2010. "Internal Basic Research, External Basic Research and the Technological Performance of Pharmaceutical Firms," Working Papers 2010/12, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
  • Handle: RePEc:hub:wpecon:201012
    as

    Download full text from publisher

    File URL: https://lirias.hubrussel.be/bitstream/123456789/3657/1/10HRP12.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
    2. Juan Alcácer & Michelle Gittelman, 2006. "Patent Citations as a Measure of Knowledge Flows: The Influence of Examiner Citations," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 774-779, November.
    3. Jaffe, Adam B & Fogarty, Michael S & Banks, Bruce A, 1998. "Evidence from Patents and Patent Citations on the Impact of NASA and Other Federal Labs on Commercial Innovation," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 183-205, June.
    4. Richard Nelson, 1962. "The Link Between Science and Invention: The Case of the Transistor," NBER Chapters,in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 549-584 National Bureau of Economic Research, Inc.
    5. Lynne G. Zucker & Michael R. Darby & Jeff S. Armstrong, 2003. "Commercializing knowledge: university science, knowledge capture and firm performance in biotechnology," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 149-170.
    6. Salter, Ammon J. & Martin, Ben R., 2001. "The economic benefits of publicly funded basic research: a critical review," Research Policy, Elsevier, vol. 30(3), pages 509-532, March.
    7. Mansfield, Edwin, 1998. "Academic research and industrial innovation: An update of empirical findings1," Research Policy, Elsevier, vol. 26(7-8), pages 773-776, April.
    8. Bronwyn H. Hall & Adam Jaffe & Manuel Trajtenberg, 2005. "Market Value and Patent Citations," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 16-38, Spring.
    9. Mansfield, Edwin, 1980. "Basic Research and Productivity Increase in Manufacturing," American Economic Review, American Economic Association, vol. 70(5), pages 863-873, December.
    10. Criscuolo, Paola & Verspagen, Bart, 2008. "Does it matter where patent citations come from? Inventor vs. examiner citations in European patents," Research Policy, Elsevier, vol. 37(10), pages 1892-1908, December.
    11. Hicks, D. & Ishizuka, T. & Keen, P. & Sweet, S., 1994. "Japanese corporations, scientific research and globalization," Research Policy, Elsevier, vol. 23(4), pages 375-384, July.
    12. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters,in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
    13. McMillan, G. Steven & Narin, Francis & Deeds, David L., 2000. "An analysis of the critical role of public science in innovation: the case of biotechnology," Research Policy, Elsevier, vol. 29(1), pages 1-8, January.
    14. Lanjouw, Jean O & Pakes, Ariel & Putnam, Jonathan, 1998. "How to Count Patents and Value Intellectual Property: The Uses of Patent Renewal and Application Data," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 405-432, December.
    15. Ashish Arora & Alfonso Gambardella & Laura Magazzini & Fabio Pammolli, 2009. "A Breath of Fresh Air? Firm Type, Scale, Scope, and Selection Effects in Drug Development," Management Science, INFORMS, vol. 55(10), pages 1638-1653, October.
    16. Gambardella, Alfonso, 1992. "Competitive advantages from in-house scientific research: The US pharmaceutical industry in the 1980s," Research Policy, Elsevier, vol. 21(5), pages 391-407, October.
    17. Stephan, Paula E., 2010. "The Economics of Science," Handbook of the Economics of Innovation, Elsevier.
    18. Jaffe, Adam B, 1989. "Real Effects of Academic Research," American Economic Review, American Economic Association, vol. 79(5), pages 957-970, December.
    19. Lim, Kwanghui, 2004. "The relationship between research and innovation in the semiconductor and pharmaceutical industries (1981-1997)," Research Policy, Elsevier, vol. 33(2), pages 287-321, March.
    20. Colin Webb & Hélène Dernis & Dietmar Harhoff & Karin Hoisl, 2005. "Analysing European and International Patent Citations: A Set of EPO Patent Database Building Blocks," OECD Science, Technology and Industry Working Papers 2005/9, OECD Publishing.
    21. Cockburn, Iain M & Henderson, Rebecca M, 1998. "Absorptive Capacity, Coauthoring Behavior, and the Organization of Research in Drug Discovery," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 157-182, June.
    22. Boris Lokshin & René Belderbos & Martin Carree, 2008. "The Productivity Effects of Internal and External R&D: Evidence from a Dynamic Panel Data Model," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(3), pages 399-413, June.
    23. Richard R. Nelson, 1959. "The Simple Economics of Basic Scientific Research," Journal of Political Economy, University of Chicago Press, vol. 67, pages 297-297.
    24. Furukawa, Ryuzo & Goto, Akira, 2006. "The role of corporate scientists in innovation," Research Policy, Elsevier, vol. 35(1), pages 24-36, February.
    25. Basberg, Bjorn L., 1987. "Patents and the measurement of technological change: A survey of the literature," Research Policy, Elsevier, vol. 16(2-4), pages 131-141, August.
    26. Fabrizio, Kira R., 2009. "Absorptive capacity and the search for innovation," Research Policy, Elsevier, vol. 38(2), pages 255-267, March.
    27. Bruno Cassiman & Reinhilde Veugelers & Pluvia Zuniga, 2008. "In search of performance effects of (in)direct industry science links," Industrial and Corporate Change, Oxford University Press, vol. 17(4), pages 611-646, August.
    28. Emmanuel Duguet & Megan MacGarvie, 2005. "How well do patent citations measure flows of technology? Evidence from French innovation surveys," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(5), pages 375-393.
    29. Stefano Brusoni & Paola Criscuolo & Aldo Geuna, 2005. "The knowledge bases of the world's largest pharmaceutical groups: what do patent citations to non-patent literature reveal?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(5), pages 395-415.
    30. Narin, Francis & Breitzman, Anthony, 1995. "Inventive productivity," Research Policy, Elsevier, vol. 24(4), pages 507-519, July.
    31. Pavitt, Keith, 1991. "What makes basic research economically useful?," Research Policy, Elsevier, vol. 20(2), pages 109-119, April.
    32. Gibbons, Michael & Johnston, Ron, 1974. "The roles of science in technological innovation," Research Policy, Elsevier, vol. 3(3), pages 220-242, November.
    33. Dietmar Harhoff & Francis Narin & F. M. Scherer & Katrin Vopel, 1999. "Citation Frequency And The Value Of Patented Inventions," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 511-515, August.
    34. Scott Stern, 2004. "Do Scientists Pay to Be Scientists?," Management Science, INFORMS, vol. 50(6), pages 835-853, June.
    35. Harhoff, Dietmar & Scherer, Frederic M. & Vopel, Katrin, 2003. "Citations, family size, opposition and the value of patent rights," Research Policy, Elsevier, vol. 32(8), pages 1343-1363, September.
    36. Nathan ROSENBERG, 2009. "Why do firms do basic research (with their own money)?," World Scientific Book Chapters,in: Studies On Science And The Innovation Process Selected Works of Nathan Rosenberg, chapter 11, pages 225-234 World Scientific Publishing Co. Pte. Ltd..
    37. Henderson, Rebecca. & Cockburn, Iain., 1994. "Measuring competence? : exploring firm effects in pharmaceutical research," Working papers 3712-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    38. Adams, James D, 1990. "Fundamental Stocks of Knowledge and Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 673-702, August.
    39. Lionel Nesta & Pier Paolo Saviotti, 2005. "COHERENCE OF THE KNOWLEDGE BASE AND THE FIRM'S INNOVATIVE PERFORMANCE: EVIDENCE FROM THE U.S. PHARMACEUTICAL INDUSTRY -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 53(1), pages 123-142, March.
    40. Carmen Matutes & Pierre Regibeau & Katharine Rockett, 1996. "Optimal Patent Design and the Diffusion of Innovations," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 60-83, Spring.
    41. Arora, Ashish & Gambardella, Alfonso, 1990. "Complementarity and External Linkages: The Strategies of the Large Firms in Biotechnology," Journal of Industrial Economics, Wiley Blackwell, vol. 38(4), pages 361-379, June.
    42. Arundel, Anthony & Kabla, Isabelle, 1998. "What percentage of innovations are patented? empirical estimates for European firms," Research Policy, Elsevier, vol. 27(2), pages 127-141, June.
    43. Narin, Francis & Hamilton, Kimberly S. & Olivastro, Dominic, 1997. "The increasing linkage between U.S. technology and public science," Research Policy, Elsevier, vol. 26(3), pages 317-330, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Anna Giunta & Filippo M. Pericoli & Eleonora Pierucci, 2016. "University–Industry collaboration in the biopharmaceuticals: the Italian case," The Journal of Technology Transfer, Springer, vol. 41(4), pages 818-840, August.
    2. Billette de Villemeur, Etienne & Versaevel, Bruno, 2017. "One Lab, Two Firms, Many Possibilities: on R&D outsourcing in the biopharmaceutical industry," MPRA Paper 76903, University Library of Munich, Germany.
    3. Eleonora Pierucci, 2015. "University-industry linkages. Among italian regions: a supply-demand analysis," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2015(2), pages 5-33.
    4. BELDERBOS, René & GILSING, Victor & SUZUKI, Shinya, 2015. "Direct And Mediated Ties To Universities: ‘Scientific’ Absorptive Capacity And Innovation Performance Of Pharmaceutical Firms," Discussion paper series 2015-06, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    5. Ashish Arora & Sharon Belenzon & Andrea Patacconi, 2015. "Killing the Golden Goose? The Decline of Science in Corporate R&D," NBER Working Papers 20902, National Bureau of Economic Research, Inc.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hub:wpecon:201012. 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: (Sabine Janssens). General contact details of provider: http://edirc.repec.org/data/emhubbe.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.