Mergers and Innovation in Big Pharma
نویسنده
چکیده
The aims of this paper are to study the e¤ects of mergers on the R&D activity of consolidated rms and to explore the relationship between ex-ante relatedness of merging parties and their ex-post performances. The analysis is conducted using data of the pharmaceutical industry for the period 1988-2004. The empirical results suggest that merged companies have on average, worst performances than the group of non-merging rms. This result is con rmed when I account for the endogeneous formation of mergers using the propensity score method and when I control for technological relatedness in selecting the control group. Finally, I nd that higher levels of technological relatedness are not associated with better R&D outcomes. JEL classi cation: L66, O31, O32.
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