TY  - JOUR
N1  - SCOPUS ID: 2-s2.0-84929774441
N2  - This paper investigates the role of real options reasoning in R&D project portfolio management and investment decisions of pharmaceutical firms. We analyse a unique dataset that integrates information on initiation and termination of clinical trials at the level of specific medical indications. Consistent with existing literature, we find a positive relationship between market size and firm entry in clinical trials. We also show that the option value of R&D investments, as proxied by the scope of R&D projects, affects the selection of target markets. Moreover, high-risk research areas attract more entry, in line with the predictions of real options theory. However, we also find that more flexibility in project duration and delayed project discontinuation attract higher rates of entry. Departures from pure real options reasoning are motivated by the presence of incremental learning in pharmaceutical R&D.
JF  - Creativity and Innovation Management
SN  - 09631690
Y1  - 2015///
AV  - none
ID  - eprints3571
TI  - Real Options and Incremental Search in Pharmaceutical R&D Project Portfolio Management
UR  - http://doi.org/10.1111/caim.12119
IS  - 2
VL  - 25
EP  - 302
PB  - Wiley
SP  - 292
A1  - Magazzini, Laura
A1  - Pammolli, Fabio
A1  - Riccaboni, Massimo
ER  -