Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 13, 2018 erstellt
Beschreibung:
We examine the effects of initial R&D competence on innovation strategies and firm growth. Using project-level drug development data for entrepreneurial pharmaceutical firms, we show that R&D performance persists, suggesting initial conditions largely determine cross-sectional variations of R&D success. We find that firms with high initial competence are exploitative in their best segment and exit through an IPO earlier. By contrast, firms with low initial competence become explorative, diversifying into multiple segments. Medicare Part-D legislation as an exogenous shock to diversification incentives suggests a causal relationship. We furthermore quantify and compare the effects of entrepreneurial firm skills and other remaining factors in initial R&D competence based on our results