Innovation and business strategy in healthcare markets
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In the first chapter, we use patent and financial data from the pharmaceutical industry to examine the effects of international innovation on profitability and the channels through which the effects take place. Positive impacts of internationalization are found for both innovation performance and financial performance. In the second chapter, we examine the impact of uncertainty on firms’ decisions related to R&D expenditures, patenting, and physical capital investments using a sample of firms in the global pharmaceuticals industry. Our results indicate that uncertainty has mixed effect on the innovation variables: it affects R&D negatively, but has a weak and ambiguous effect on patents. The estimated impact on capital investment is negative. In the third chapter, using U.S. Food and Drug Administration (FDA) recall data from 2001-2013, we examine various factors that may determine recalls. We consider a wide range of firm-specific and device-specific measures such as their R&D expenditures, foreign versus domestic ownership, size of firms, degree of vertical integration, device complexity, profitability, among several other variables. In our empirical analysis, we examine whether there are systematic longer-run differences in recalled devices across the firms in our sample, and whether firm-specific and device-specific attributes can explain why some firms systematically have a higher or lower number of recalls.