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

Author

Listed:
  • 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)

Abstract

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.

Suggested Citation

  • Giulio Bottazzi & Tatiana Plotnikova, 2010. "Productivity and Heterogeneous Knowledge: Exploring the Relationship in a Sample of Drug Developers," Jena Economics Research Papers 2010-044, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2010-044
    as

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    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. 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.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics

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