Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70156
Authors: 
Rake, Bastian
Year of Publication: 
2012
Series/Report no.: 
Jena Economic Research Papers 2012,018
Abstract: 
Recent empirical contributions emphasize the importance of (potential) market size for the development of new pharmaceuticals. At the same time many scholars point out the importance of of scientific advances for the industry's R&D activities. Against this background I analyze the relationship between (potential) market size, technological opportunities, and the number of new pharmaceuticals in the United States. Technological opportunities are operationalized as growth rates of the relevant knowledge stock as proposed by Andersen (1999, 1998). I analyze a unique dataset by using an entry stock Poisson quasi-maximum likelihood estimator. The results reveal a rather robust and significantly positive response of the number of new pharmaceuticals, i.e., new molecular entities or new drug approvals, to market size and technological opportunities.
Subjects: 
Determinants of Innovation
Pharmaceuticals
Demand
Technological Opportunities
JEL: 
O31
J10
J20
Document Type: 
Working Paper

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