The effects of integration and organization on investment decisions and performance : theory and evidence from the pharmaceutical industry

摘要

This thesis explores different aspects of the effect the organization and the level of vertical integration of an organization have on the investment decisions the firm takes and subsequently the effect of such decisions on the performance of the firm. This thesis uses the biopharmaceutical industry in order to investigate these issues due to the heterogeneity of organizations and of the levels of integration that can be observed in this industry. The first chapter is joint work with David Scharfstein. This chapter compares the clinical trial strategies and performance of large, established ("mature") biopharmaceutical firms to those of smaller ("early stage") firms that have not yet successfully developed a drug. We study a sample of 235 cancer drug candidates that entered clinical trials during the period 1990-2002 and were sponsored by public firms. Early stage firms are more likely than mature firms to advance drug candidates from Phase I to Phase II clinical trials. However, early stage firms have much less promising clinical results in their Phase II trials and their Phase II drug candidates are also less likely to advance to Phase III and to receive Food and Drug Administration approval.