Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/266766 
Year of Publication: 
2022
Citation: 
[Journal:] Journal of Economics & Management Strategy [ISSN:] 1530-9134 [Volume:] 31 [Issue:] 4 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2022 [Pages:] 942-960
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
This study provides an assessment of the R&D–patent relation of European pharmaceutical firms that are not flawed by endogeneity biases. Firms invest in R&D and generate latent knowledge which then manifests in observable patent outcomes through a Poisson model. The process of turning R&D into knowledge is described by a production process subject to inefficiency and endogeneity. To estimate a Poisson stochastic frontier model, the suggested novel copula‐based approach directly accounts for the dependence between the endogenous regressors and the inefficiency component. Hence, its implementation does not require any instrumental variables. Simulation results underline that the proposed estimator outperforms conventional instrumental variable estimators. Neglecting endogeneity leads to a substantial underestimation of the R&D elasticity of patents generated in the European pharmaceutical industry.
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article
Document Version: 
Published Version

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