Shareholder returns and the exploration-exploitation dilemma: R&D announcements by biotechnology firms |
| |
| Authors: | Peter Mc Namara Charles Baden-Fuller |
| |
| Institution: | a UCD Business School, University College Dublin, Belfield, Dublin 4, Ireland
b Cass Business School, City University, Bunhill Row, London EC1Y 8TZ, United Kingdom |
| |
| Abstract: | We explore a financial returns dimension of the exploration-exploitation dilemma. Using 1277 R&D announcements by 178 listed bio-pharmaceutical firms, we examine whether investors are myopic along the continuum of exploration (patenting and preclinical trials) to exploitation (human clinical trials and NDA). We find that investors respond positively at every stage, but there are differences between small and large firms. For small firms exploration is favored, provided it is focused. For large firms, there is value in both exploration and exploitation. Projects which are part of an alliance are no more likely to generate abnormal returns. Policy implications are discussed. |
| |
| Keywords: | R& D Knowledge based view Financial performance Event study Alliances |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
