TY  - JOUR
AU  - Henderson,Rebecca
AU  - Cockburn,Iain
TI  - Scale, Scope and Spillovers: The Determinants of Research Productivity  in the Pharmaceutical Industry
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4466
PY  - 1993
Y2  - September 1993
UR  - http://www.nber.org/papers/w4466
L1  - http://www.nber.org/papers/w4466.pdf
N1  - Author contact info:
Rebecca Henderson
Heinz Professor of Environmental Management
Harvard Business School
Morgan 445
Soldiers Field
Boston, MA 02163
Tel: 617/495-8014
Fax: 617/496-4072
E-Mail: rhenderson@hbs.edu

Iain M. Cockburn
School of Management
Boston University
595 Commonwealth Ave
Boston, MA 02215
Tel: 617/588-1486
Fax: 815/550-2353
E-Mail: cockburn@bu.edu
AB  - This paper presents the results of a study of the determinants of research productivity in the pharmaceutical industry. Using disaggregated, internal firm data at the research program level from ten major pharmaceutical companies, we find no evidence of increasing returns to scale at either the firm or the research program level. However our results suggest that there are three benefits to running research programs within the context of larger and more diversified R&D efforts: economies of scale arising from sharing fixed costs; economies of scope arising from the opportunity to exploit knowledge across program boundaries within the firm; and the enhanced ability to absorb internal and external spillovers. We also find that spillovers between firms may playa major role in increasing research productivity. The paper also speaks directly to the question of firm heterogeneity. A significant proportion of the "firm effect" identified in previous studies can be explained by the slowly changing composition of the research portfolio, as well as by less easily measured aspects of innovative capability.
ER  -