Mergers and innovation in big pharma
Mergers and innovation in big pharma
The aims of this paper are to study the effects of mergers on the R&D activity of consolidated firms and to explore the relationship between ex-ante relatedness of merging parties and their ex-post performances. The analysis is conducted using data of the pharmaceutical industry for the period 1988–2004. The empirical results suggest that merged companies have on average, worse performances than the group of non-merging firms.
This result is confirmed when I account for the endogeneous formation of mergers by selecting a control group first using the propensity score method and then taking into account the technological relatedness of the firms. Finally, I find that higher levels of technological relatedness are not associated with better R&D outcomes
m&a, innovation, product relatedness, technological relatedness
70-79
Ornaghi, Carmine
33275e47-4642-4023-a195-39c91d0146b0
January 2009
Ornaghi, Carmine
33275e47-4642-4023-a195-39c91d0146b0
Abstract
The aims of this paper are to study the effects of mergers on the R&D activity of consolidated firms and to explore the relationship between ex-ante relatedness of merging parties and their ex-post performances. The analysis is conducted using data of the pharmaceutical industry for the period 1988–2004. The empirical results suggest that merged companies have on average, worse performances than the group of non-merging firms.
This result is confirmed when I account for the endogeneous formation of mergers by selecting a control group first using the propensity score method and then taking into account the technological relatedness of the firms. Finally, I find that higher levels of technological relatedness are not associated with better R&D outcomes
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e-pub ahead of print date: 6 May 2008
Published date: January 2009
Keywords:
m&a, innovation, product relatedness, technological relatedness
Organisations:
Economics
Identifiers
Local EPrints ID: 150401
URI: http://eprints.soton.ac.uk/id/eprint/150401
ISSN: 0167-7187
PURE UUID: 0522f375-c35f-4445-b469-0fbc897bc4c6
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Date deposited: 05 May 2010 09:39
Last modified: 14 Mar 2024 02:49
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