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Success in Pharmaceutical Research: The Changing Role of Scale and Scope Economies, Spillovers and Competition


  • Tatiana Plotnikova

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


This paper investigates the determinants of success in the development of new drugs. In specific, it explores the factors of success in drug development programs at different stages of innovation process. We use economies of scale, scope, R&D competition and technological spillovers as explanatory variables and test whether the effect of these variables on the success of a project differs in relation to the discovery and development stages of innovation, respectively. Our main finding is that spillovers, including spillovers from collaboration, are important in explaining the success of projects during the discovery stage of innovation, while in the later development stage, the effects of competition outweigh any benefits from spillovers.

Suggested Citation

  • Tatiana Plotnikova, 2010. "Success in Pharmaceutical Research: The Changing Role of Scale and Scope Economies, Spillovers and Competition," Jena Economic Research Papers 2010-045, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2010-045

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    References listed on IDEAS

    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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    Cited by:

    1. Burak Dindaroglu, 2011. "R&D Productivity and Firm Size in Semiconductors and Pharmaceuticals: Evidence from Citation Yields," Working Papers 1101, Izmir University of Economics.
    2. Thomas Bolli & Martin Woerter, 2013. "Technological Diversification and Innovation Performance," KOF Working papers 13-336, KOF Swiss Economic Institute, ETH Zurich.

    More about this item


    economies of scale and scope; spillovers; competition; R&D; innovation process;

    JEL classification:

    • 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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