Skip to main content

Advertisement

SpringerLink
Log in

Growth and Diversification Patterns of the Worldwide Pharmaceutical Industry

  • Published:
Review of Industrial Organization Aims and scope Submit manuscript

Abstract

In this paper we present a description of the growth and diversification patterns of the top firms in the worldwide pharmaceutical industry. We apply parametric and non-parametric methods to the analysis of firms size distribution and its dynamics. Our study confirms the results of previous empirical analyses of the growth dynamics of firms but also reveals structural features of the pharmaceutical industry that have never been investigated before. Using firm sales at a high level of disaggregation, we are able to analyze the diversification structure of the firm and study its relation with the aggregate firm size.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • L. A. N. Amaral S. V. Buldyrev S. Havlin M. A. Salinger H. E. Stanley M. H. R. Stanley (1997) ArticleTitle‘Scaling Behavior in Economics: The Problem of Quantifying Company Growth’ Physica A. 244 1–24

    Google Scholar 

  • T. Boeri U. Cramer (1992) ArticleTitle‘Employment Growth, Incumbents and Entrants: Evidence from Germany’ International Journal of Industrial Organization. 10 545–565

    Google Scholar 

  • G. Bottazzi (2001) ‘Firm Diversification and the Law of Proportionate Effect’ LEM Working Paper S.Anna School of Advanced Studies. Pisa, WP 2001--1

    Google Scholar 

  • G. Bottazzi (2004) ‘Subbotools: A Users Manual’ LEM Working Paper S.Anna School of Advanced Studies, Pisa, WP 2004--14

    Google Scholar 

  • G. Bottazzi A. Secchi (2003a) ArticleTitle‘Why are Distributions of Firm Growth Rates Tent-shaped?’ Economics Letters. 80 415–420

    Google Scholar 

  • G. Bottazzi A. Secchi (2003b) ArticleTitle‘Common Properties and Sectoral Specificities in the Dynamics of U.S Manufacturing Companies’. Review of Industrial Organization. 23 217–232

    Google Scholar 

  • G. Bottazzi E. Cefis G. Dosi A. Secchi (2003) ‘Invariances and Diversities in the Evolution of Manufacturing Industry’ LEM Working Paper S.Anna School of Advanced Studies, Pisa, 2003--21

    Google Scholar 

  • G. Bottazzi G. Dosi M. Lippi F. Pammolli M. Riccaboni (2001) ArticleTitle‘Innovation and Corporate Growth in the Evolution of the Drug Industry’ International Journal of Industrial Organization. 19 1161–1187

    Google Scholar 

  • R.E. Caves (1998) ArticleTitle‘Industrial Organization and New Findings on the Turnover and Mobility of Firms’ Journal of Economic Literature. 36 1947–1982

    Google Scholar 

  • D. G. Champernowne (1953) ArticleTitle‘A Model of Income Distribution’ The Economic Journal. 163 318–351

    Google Scholar 

  • B. Contini R. Revelli (1992) ArticleTitle‘The Relationship between Firm Growth and Labor Demand’ Small Business Economics. 1 309–314

    Google Scholar 

  • T. Dunne M. J. Roberts L. Samuelson (1988) ArticleTitle‘The Growth and Failure of U.S Manufacturing Plants’. Quarterly Journal of Economics. 104 671–698

    Google Scholar 

  • D. S. Evans (1987) ArticleTitle‘The Relationship between Firm Growth, Size and Age: Estimates for 100 Manufacturing Industries’ Journal of Industrial Economics. 35 567–581

    Google Scholar 

  • X. Gabaix (1999) ArticleTitle‘Zipf’s Law for Cities: An Explanation’ Quarterly Journal of Economics. 114 739–767

    Google Scholar 

  • P. A. Geroski (1998) ArticleTitle‘An Applied Econometrician’s View of Large Company Performance’ Review of Industrial Organization. 13 271–293

    Google Scholar 

  • P. A. Geroski S. J. Machin C. F. Walters (1997) ArticleTitle‘Corporate Growth and Profitability’ Journal of Industrial Economics. 45 171–189

    Google Scholar 

  • R. Gibrat (1931) Les inégalités économiques Librairie du Recueil Sirey Paris

    Google Scholar 

  • B. H. Hall (1987) ArticleTitle‘The Relationship between Firm Size and Firm Growth in the US Manufacturing Sector’. Journal of Industrial Economics. 35 583–606

    Google Scholar 

  • P. Hall M. York (2001) ArticleTitle‘On the Calibration of Silverman’s Test for Multimodality’ Statistica Sinica. 11 515–536

    Google Scholar 

  • P. E. Hart S. J. Prais (1956) ArticleTitle‘The Analysis of Business Concentration’ Journal of the Royal Statistical Society. 119 150–191

    Google Scholar 

  • S. Hymer P. Pashigian (1962) ArticleTitle‘Firm Size and Rate of Growth’ Journal of Political Economy. 70 556–569

    Google Scholar 

  • C. Kleiber S. Kotz (2003) Statistical Size Distributions in Economics and Actuarial Sciences John Wiley & Sons New York

    Google Scholar 

  • P. Krugman (1996) The Self-Organizing Economy MA: Blackwell Cambridge

    Google Scholar 

  • M. S. Kumar (1985) ArticleTitle‘Growth, Acquisition Activity and Firm Size: Evidence from the United Kingdom’ Journal of Industrial Economics. 33 327–338

    Google Scholar 

  • L. Ljung (1987) System Identification. Theory for the User Prentice Hall New Jersey

    Google Scholar 

  • B. B. Mandelbrot (1997) Fractals and Scaling in Finance Springer Verlag Berlin

    Google Scholar 

  • E. Mansfield (1962) ArticleTitle‘Entry, Gibrat’s Law, Innovation and the Growth of Firms’ American Economic Review. 52 1023–1051

    Google Scholar 

  • K. Matia D. Fu A. O. Schweiger S. V. Buldyrev F. Pammolli M. Riccaboni H. E. Stanley (2004) ArticleTitle‘Statistical Properties of Structure and Growth of Business Firms’ Europhysics Letters. 67 498–503

    Google Scholar 

  • L. Orsenigo F. Pammolli M. Riccaboni (2000) ArticleTitle‘Technological Change and Network Dynamics: Lessons from the Pharmaceutical Industry’ Research Policy. 30 485–508

    Google Scholar 

  • A. Pagan A. Ullah (1999) Nonparametric Econometrics Cambridge University Press Cambridge, U.K.

    Google Scholar 

  • R. E. Quandt (1966) ArticleTitle‘On the Size Distribution of Firms’ American Economic Review. 56 416–432

    Google Scholar 

  • W. H. Rogers (1993) ArticleTitle‘Regression Standard Errors in Clustered Samples’ Stata Technical Bullettin, 13, 19--23. Reprinted in , Stata Technical Bulletin. 3 88–94

    Google Scholar 

  • B. W. Silverman (1981) ArticleTitle‘Using Kernel Density Estimates to Investigate Multimodality’ Journal of the Royal Statistical Society B. 43 97–99

    Google Scholar 

  • B. W. Silverman (1986) Density Estimation for Statistics and Data Analysis Chapman and Hall London

    Google Scholar 

  • H. A. Simon C. P. Bonini (1958) ArticleTitle‘The Size Distribution of Business Firms’ American Economic Review. 48 607–617

    Google Scholar 

  • M. H. R. Stanley S. V. Buldyrev S. Havlin R. Mantegna M. A. Salinger H. E. Stanley (1996a) ArticleTitle‘Zipf plots and the size distribution of firms’ Economics Letters. 49 453–457

    Google Scholar 

  • M. H. R. Stanley L. A. N. Amaral S. V. Buldyrev S. Havlin H. Leschhorn P. Maass M. A. Salinger H. E. Stanley (1996b) ArticleTitleScaling Behavior in the Growth of Companies’ Nature 379 804–806

    Google Scholar 

  • M. T. Subbotin (1923) ArticleTitle‘On the Law of Frequency of Errors’ Matematicheskii Sbornik. 31 296–301

    Google Scholar 

  • J. Sutton (1997) ArticleTitle‘Gibrat’s Legacy’ Journal of Economic Literature. 35 40–59

    Google Scholar 

  • D. Teece R. Rumelt G. Dosi S. Winter (1994) ArticleTitleUnderstanding Corporate Coherence: Theory and Evidence Journal of Economic Behavior and Organization 23 1–30

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. S.Anna School of Advanced Studies, P.zza Martiri della Libertà 33, 56100, Pisa, Italy

    Giulio Bottazzi & Angelo Secchi

Authors
  1. Giulio Bottazzi
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Angelo Secchi
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Giulio Bottazzi.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Bottazzi, G., Secchi, A. Growth and Diversification Patterns of the Worldwide Pharmaceutical Industry. Rev Ind Organ 26, 195–216 (2005). https://doi.org/10.1007/s11151-004-7296-5

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11151-004-7296-5

Keywords

Search

Navigation