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Research and development spending and technical efficiency: evidence from biotechnology and pharmaceutical sector

Grant, Kevin, Matousek, Roman, Meyer, Martin, Tzeremes, Nickolaos G. (2019) Research and development spending and technical efficiency: evidence from biotechnology and pharmaceutical sector. International Journal of Production Research, . pp. 1-15. ISSN 0020-7543. (doi:10.1080/00207543.2019.1671623) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:77472)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)
Official URL
https://dx.doi.org/10.1080/00207543.2019.1671623

Abstract

Set within the expenditure context of the global financial crisis (GFC), this paper explores how the research and development (R&D) expenditures of biotechnology and pharmaceutical companies affect their technical efficiency levels. A balanced panel of 149 US firms operating in the biotechnology and pharmaceutical sector (covering the period 2000–2017) was employed. Output-oriented partial frontier measures were used to measure the effect of R&D expenditure on firms’ technical efficiency levels. Findings suggest that company efficiency is an important contributor on the effects of R&D on productivity and efficiency. Result suggests that a relationship between technical efficiency and R&D expenditure exhibits a ‘U’-shape relationship. The estimated efficiency of biotechnology firms is higher compared to pharmaceutical firms driven by their higher R&D expenditure levels. We demonstrate that R&D expenditures are essential for firm efficiency. We posit that a threshold level for achieving optimal efficiency levels exist, which can be used to inform managerial and policy-making decisions at the firm level.

Item Type: Article
DOI/Identification number: 10.1080/00207543.2019.1671623
Uncontrolled keywords: R&D efficiency, technology, innovation, data envelopment analysis, US biotechnology and pharmaceutical firms
Divisions: Divisions > Kent Business School - Division > Kent Business School (do not use)
Depositing User: Martin Meyer
Date Deposited: 15 Oct 2019 13:26 UTC
Last Modified: 16 Feb 2021 14:08 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/77472 (The current URI for this page, for reference purposes)
Meyer, Martin: https://orcid.org/0000-0002-5598-9480
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