Technological knowledge and firm performance of pharmaceutical firms

How efficient are firms at utilizing their technological knowledge stocks? In this paper we focus on a firm's breadth and depth of technological knowledge and investigate their differential effects on two performance measures: return on capital and sales growth. Using a sample of 29 pharmaceutical firms we conduct data envelopment analysis (DEA) to determine those firms that are the most efficient converters of breadth and depth of technological knowledge into performance, and the knowledge dimension that the inefficient firms ought to focus upon to improve their performance.

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