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Research and development productivity map: visualization of industry status
Author(s) -
Shimura H.,
Masuda S.,
Kimura H.
Publication year - 2014
Publication title -
journal of clinical pharmacy and therapeutics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.622
H-Index - 73
eISSN - 1365-2710
pISSN - 0269-4727
DOI - 10.1111/jcpt.12126
Subject(s) - productivity , consolidation (business) , data envelopment analysis , multifactor productivity , business , operations management , industrial organization , partial productivity , knowledge management , marketing , econometrics , computer science , economics , total factor productivity , statistics , accounting , mathematics , economic growth
Summary What is known and objective Decline in research and development (R&D) productivity and changes in the business environment have led to pharmaceutical company management to strive to improve R&D productivity. This decline is widely considered to be a major cause of industry consolidation and has received increased scholarly attention. This study aims to construct an R&D productivity map to visualize the industry's R&D productivity and to identify similarity in corporate actions with a view to investigate whether there is a relationship between deterioration in R&D productivity and industry consolidation. Methods Research and development productivity is decomposed into two subprocesses to measure productivity: R&D efficiency and R&D effectiveness, and scores were calculated using a two‐stage data envelopment analysis ( DEA ). The map is then constructed by projecting outputs. To identify any relationship between DEA scores and merger and acquisition transactions, a multiple regression model is employed. Results and discussion Data on 21 global pharmaceutical companies, statistical results indicated that companies with lower R&D efficiency scores were more likely to engage in consolidation. Three US companies that were least successful in terms of R&D effectiveness, as measured by our indicators, were either acquired or changed their business model. Conclusion The R&D productivity map is a useful means for visualizing productivity among companies. By grouping companies into four groups, behavioural commonalities can be observed. The R&D productivity map should be useful for monitor the industry's productivity and help to improve it.