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Productivity and Heterogeneous Knowledge: Exploring the Relationship in a Sample of Drug Developers

  • Giulio Bottazzi

    ()

    (Sant'Anna School for Advanced Studies, Pisa)

  • Tatiana Plotnikova

    ()

    (DFG Research Training Program "The Economics of Innovative Change", Friedrich-Schiller-University Jena, Germany)

This paper aims to investigate the effect of knowledge characteristics on the total factor productivity of firms developing drugs in the pharmaceutical industry. We decompose knowledge into knowledge associated with the technological firm portfolio and knowledge related to R&D projects, which represent drug development at the clinical testing stage. The latter is attributed to the knowledge of relevant markets where the drugs will be sold. The results show that the effect of technological coherence vs. market coherence and of accumulated knowledge on the productivity of firms differs. Productivity increases with the number of patents and decreases with the patent diversity and project portfolio coherence. When considering only the project knowledge, the diversity of the project portfolio positively affects productivity.

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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2010-044.

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Date of creation: 26 Jul 2010
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Handle: RePEc:jrp:jrpwrp:2010-044
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  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. Scott, John T & Pascoe, George, 1987. "Purposive Diversification of R and D in Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 36(2), pages 193-205, December.
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