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High-growth firms in changing competitive environments: the US pharmaceutical industry (1963 to 2002)

Mazzucato, Mariana and Parris, Stuart (2015). High-growth firms in changing competitive environments: the US pharmaceutical industry (1963 to 2002). Small Business Economics, 44(1) pp. 145–170.

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Firms across sectors and regions are highly skewed in their ability to engage with innovation and even more skewed in their ability to translate investments in innovation into higher growth. Recent attention has been placed on the importance of ‘high-growth firms’ (HGF) for innovation policy. Our paper explores under what conditions HGF matter for translating R&D investments into economic growth and how this depends on firm-specific and industry-specific factors. We use quantile regression techniques to study the R&D–growth relationship in HGF compared to low-growth firms. Unlike previous studies, we pay particular attention to whether this relationship depends on the particular period in the industry’s life cycle. We focus on the US pharmaceutical industry from 1963 to 2002 and find that the R&D–growth relationship is sensitive to the changing competitive environment over the industry’s history, which suggests that innovation policy must focus not only on firm attributes but also competitive structures.

Item Type: Journal Item
Copyright Holders: 2014 Springer Science+Business Media New York
ISSN: 1573-0913
Project Funding Details:
Funded Project NameProject IDFunding Body
FINNOV Finance, Innovation and Growth: Changing Patterns and Policy Implications217466FP7
Keywords: high-growth firms; research and development; competitive environment; quantile regression; pharmaceutical industry
Academic Unit/School: Faculty of Arts and Social Sciences (FASS) > Politics, Philosophy, Economics, Development, Geography
Faculty of Arts and Social Sciences (FASS)
Interdisciplinary Research Centre: Innovation, Knowledge & Development research centre (IKD)
International Development & Inclusive Innovation
Item ID: 41976
Depositing User: Stuart Parris
Date Deposited: 30 Jan 2015 09:45
Last Modified: 09 Feb 2017 13:21
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