Giulio Bottazzi, Giovanni Dosi, Marco Lippi, Fabio Pammolli, and Massimo Riccaboni

Innovation and corporate growh in the evolution of the drug industry
Keywords: Innovation; Corporate growth; Drug industry; Evolution
JEL classification: L1; L6; O3

Abstract: This work studies the processes of growth of the worlds top 150 pharmaceutical firms, on the grounds of an original database which also allows disaggregate analysis at the level of single therapeutical classes and chemical entities. Our findings show that the industry - whose long-term evolution is driven by innovation, imitation and permanent creation of new markets - displays (i) "fat tails" in the distribution of growth shocks, present at all levels of aggregation, with (relatively rare) big "spurs of growth", (ii) a significant autocorrelation of growth rates, (iii) different "lifecycles" of diverse types of products, and the persistent forms of heterogeneity across firms in terms of innovative output, which, however, do not seem to affect comparative growth performances.