| This dissertation examines the competitive performance of publicly traded companies in the US pharmaceutical industry. A central argument is that company performance responds positively to certain types of regional attributes, including university research spending, the presence of related and supporting industries, rivalry conditions (density of competition), and overall levels of industrial R&D. The main hypothesis is that firms located within production clusters outperform their counterparts located elsewhere. More specifically, the dissertation tests the proposition that a firm's financial and innovation performance is affected by its immediate geographic environment, notably with regard to technological inputs and markets.;The study's central hypothesis is initially evaluated via a series of t-tests. These tests indicate that firms located in states with location quotients >1 (pharmaceutical employment) outperform their counterparts located in all other states. Performance measures include standard accounting metrics such as return on assets, return on investment, and Tobin's Q, as well as an innovation variable based upon patent counts. The ANOVA results point to a direct relationship between company performance and the degree of spatial clustering. ANOVA tests also point to significant regional variations in company performance.;On the basis of these results, a series of ordinary least squares (OLS) regression models are calibrated to explore the contribution of locational factors and firm-level strategic characteristics to four key dimensions of company performance (return on assets [ROA], return on investment [ROI], Tobin's Q, and patent counts). Locational factors are found to play a significant role in each of these models. The most significant locational variables include university research spending, overall industrial R&D, local retail demand, and the degree of spatially concentrated production.;The primary inference that flows from the empirical analysis is that companies that operate in knowledge-intensive sectors can maximize their financial and/or innovation potential by locating in regions that contain large numbers of competitors. This conclusion is supported by the fact that the top performers in the pharmaceutical industry are located in close proximity to each other. Such firms are also located close to major universities, suggesting an important link between basic academic research and private sector innovation. |
