Title:
The Outsourcing of R&D through Acquisitions in the Pharmaceutical Industry
The Outsourcing of R&D through Acquisitions in the Pharmaceutical Industry
Author(s)
Higgins, Matthew
Rodriguez, Daniel
Rodriguez, Daniel
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Abstract
We examine the performance of 160 pharmaceutical acquisitions from 1994-2001 and find evidence that on average
acquirers realize significant positive returns. These returns are positively correlated with prior acquirer access to
information about the research and development activities at target firms and a superior negotiating position. A
unique Desperation Index is employed in order to determine the current status of a firm’s internal productivity. We
find that firms experiencing declines in internal productivity or which are more desperate are more likely to engage
in an outsourcing type acquisition in an effort to replenish their research pipelines.
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Date Issued
2005-02-27
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273660 bytes
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Text
Resource Subtype
Working Paper