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on Technology and Industrial Dynamics |
| By: | Gautier Duflos (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Etienne Pfister (BETA-Règles - Université de Nancy II) |
| Abstract: | This article analyzes the individual determinants of acquisition activity and target choices in the pharmaceutical industry over the period 1978-2002. The "innovation gap" hypothesis states that acquiring firms lack promising drug compounds and acquire firms with more promising drug prospects. A duration model implemented over a panel of more than 400 firms relates the probabilities of being an purchaser or a target to financial, R&D ant patent data to investigate this explanation more deeply. Results show that purchasers are firms with a lower Tobin's Q and decreasing sales, which could indicate that acquisitions are used to compensate for low internal growth prospects. Firms with a higher proportion of radical patents in their portfolio, especially in pharmaceutical and biothechnological patent classes, face a higher probability of being targeted, indicating that acquiring firms are indeed searching for innovative competencies. However, acquiring firms also present a significant absorptive capacity : their R&D investment increases in the year preceding the operation and their patent stock is larger and more diversified than for non-acquiring firms. Finally, we observe that over the last ten years of the sample period, firms have paid a greater attention to the size of the target's portfolio. |
| Keywords: | M&A, pharmaceutical, innovations, patent citations. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:paris1:halshs-00331211_v1&r=tid |
| By: | Michael Rothgang |
| Abstract: | The EU Barcelona target assumes a close causal relationship between corporate R&D, the competitiveness of business firms and the economic performance of industrial countries. Testing this hypothesis, this paper contrasts innovation and production activities in four research-intensive manufacturing sectors (chemicals and pharmaceuticals, motor vehicles, machinery, and electrical engineering). Starting point are observed long-term changes in worldwide value added of the manufacturing sector.The empirical analysis is based on a unique survey of R&D-intensive business firms in Germany and 50 personal interviews in large industrial companies. The results show that there is no simple connection between R&D and competitiveness. Moreover, the likely consequences of promoting R&D differ substantially between industries. |
| Keywords: | Sectoral innovation systems, corporate R&D Strategies, chemicals and pharmaceuticals, machinery, electrical engineering,motor vehicles, bazaar effect |
| JEL: | L6 O23 R32 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0059&r=tid |
| By: | André van Stel; Mickey Folkeringa; Kashifa Suddle; Sita Tan |
| Abstract: | Business dynamics in an industry is generally seen as an important indicator of the industry's level of competitiveness and economic performance. Two types of business dynamics may be distinguished: business dynamics reflecting competition by new-firm entries and business dynamics reflecting competition among incumbent firms. A growing literature pays attention to the important role of the former type of business dynamics (the starting up of new firms) for achieving economic growth. However, the latter type of business dynamics tends to be overlooked in this type of literature. In part this is due to the large requirements, both in terms of data and in terms of methodology, of measuring competition among incumbent firms. A sophisticated indicator for measuring the extent of business dynamics among incumbent firms in an industry is the mobility index. In the current paper we compute mobility indices for 16 industries -covering the whole private sector except for the primary sectors of economy- in the Netherlands over the period 2000-2006, and compare the values of the mobility indices across the sectors. |
| Date: | 2008–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h200816&r=tid |
| By: | Klaus M. Schmidt; (Department of Economics, University of Munich, Ludwigstrasse 28, D-80539 Muenchen, Germany; ) |
| Abstract: | Many high technology goods are based on standards that require access to several patents that are owned by different IP holders. We investigate the royalties chosen by IP holders under different market structures. Vertical integration of an IP holder and a downstream producer solves the double mark-up problem between these firms. Nevertheless, it may raise royalty rates and reduce output as compared to non-integration. Horizontal integration of IP holders (or a patent pool) solves the complements problem but not the double mark-up problem. Vertical integration discourages entry and reduces innovation incentives, while horizontal integration always encourages entry and innovation. |
| Keywords: | IP rights, complementary patents, standards, licensing, patent pool, vertical integration |
| JEL: | L15 O31 L24 O32 K11 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:249&r=tid |
| By: | Klaus Desmet (Universidad Carlos III); Stephen L. Parente (University of Illinois) |
| Abstract: | This paper proposes a novel mechanism whereby larger markets increase competition and facilitate process innovation. Larger markets, in the sense of more people or more open trade, support a larger variety of goods, resulting in a more crowded product space. This raises the price elasticity of demand and lowers mark-ups. Firms, therefore, become larger to break even. This facilitates process innovation as larger firms can amortize R&D costs over more goods. We demonstrate this mechanism in a standard model of process and product innovation. In doing so, we question some important results in the new trade and endogenous growth literatures. |
| Keywords: | trade; population; price elasticity; competition; innovation; firm-size; scale effects; Dixit-Stiglitz; Hotelling |
| JEL: | F12 L11 O31 |
| Date: | 2008–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2008-10&r=tid |