Valuing biopharmaceutical alliances : decisions for new product development in the pharmaceutical industry : the effects of corporate downsizing on women

Abstract

This thesis presents two empirical essays, which examine the organization of research and development in the pharmaceutical industry and a third essay that examines the effects of corporate downsizing on the growing number of women in the labor force. Chapter 2 begins by evaluating strategic alliances undertaken in the pharmaceutical industry. The analysis estimates equity market reaction to the announcements of these partnerships and determines how partner and transaction characteristics affect this reaction. The results indicate that these partnerships have created significant shareholder value. Additionally, there is significant heterogeneity across alliances. Equity participation is correlated with a higher level of value creation. Alliances undertaken for the purposes of developing or marketing products that target complex diseases create less shareholder value. Finally, R&D firms that have been previously performing well do not gain as much as their more poorly performing counterparts. Chapter 3 examines the organization of new product development. Using a unique dataset of approved drug products, the empirical analyses include firm characteristics and new drug characteristics in limited dependent variable estimation of the firm decision over how to organize its R&D. The results show that a firm's research expertise as measured by patent stock is correlated with less integrated development, and that a firm's development expertise as measured by previously approved drugs, is correlated with integrated development. Additionally, firms with new products designed for complex diseases bring them to market through in-house resources. The final chapter employs a comprehensive dataset on downsized and non­downsized workers to complete a series of estimations that show a convergence in the downsizing experiences of men and women in the probability of displacement and wage loss due to downsizing. In addition to this convergence, the analysis finds that the experiences of men and women have maintained persistent dissimilarities. Specifically, the probability of leaving the labor force, of finding part-time reemployment, and the duration of unemployment following displacement continues to be significantly higher for downsized women. Finally, the probability of reemployment is significantly lower for downsized women. Interestingly, marital status accounts for a significant proportion of these findings.