Universität zu Köln

Haschka, Rouven E. and Herwartz, Helmut (2022). Endogeneity in pharmaceutical knowledge generation: An instrument-free copula approach for Poisson frontier models. J. Econ. Manage. Strategy, 31 (4). S. 942 - 961. HOBOKEN: WILEY. ISSN 1530-9134

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Abstract

This study provides an assessment of the R&D-patent relation of European pharmaceutical firms that are not flawed by endogeneity biases. Firms invest in R&D and generate latent knowledge which then manifests in observable patent outcomes through a Poisson model. The process of turning R&D into knowledge is described by a production process subject to inefficiency and endogeneity. To estimate a Poisson stochastic frontier model, the suggested novel copula-based approach directly accounts for the dependence between the endogenous regressors and the inefficiency component. Hence, its implementation does not require any instrumental variables. Simulation results underline that the proposed estimator outperforms conventional instrumental variable estimators. Neglecting endogeneity leads to a substantial underestimation of the R&D elasticity of patents generated in the European pharmaceutical industry.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Haschka, Rouven E. UNSPECIFIED UNSPECIFIED UNSPECIFIED Herwartz, Helmut UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-665637
DOI:	10.1111/jems.12491
Journal or Publication Title:	J. Econ. Manage. Strategy
Volume:	31
Number:	4
Page Range:	S. 942 - 961
Date:	2022
Publisher:	WILEY
Place of Publication:	HOBOKEN
ISSN:	1530-9134
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language RESEARCH-AND-DEVELOPMENT; COUNT-DATA; CROSS-COUNTRY; TECHNOLOGICAL OPPORTUNITY; DEVELOPMENT EFFICIENCY; PATENTS-R; INNOVATION; PRODUCTIVITY; FIRMS; COLLABORATION Multiple languages Economics; Management Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/66563