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

journal contribution
posted on 2023-06-08, 19:49 authored by Mariana Mazzucato, Stuart Parris
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.

History

Publication status

  • Published

Journal

Small Business Economics

ISSN

0921-898X

Publisher

Springer

Issue

1

Volume

44

Page range

145-170

Department affiliated with

  • SPRU - Science Policy Research Unit Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2015-01-28

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