Shareholder returns and the exploration–exploitation dilemma:\ud R&D announcements by biotechnology firms

摘要

We explore a financial returns dimension of the exploration–exploitation dilemma. Using 1277 R&D announcements by 178\udlisted bio-pharmaceutical firms, we examine whether investors are myopic along the continuum of exploration (patenting and\udpreclinical trials) to exploitation (human clinical trials and NDA).We find that investors respond positively at every stage, but there\udare differences between small and large firms. For small firms exploration is favored, provided it is focused. For large firms, there\udis value in both exploration and exploitation. Projects which are part of an alliance are no more likely to generate abnormal returns.\udPolicy implications are discussed.