Firm value and geographic competitive advantage: Evidence from the U.S. pharmaceutical industry

Vigdis Boasson, Emil Boasson, Alan MacPherson, Hyun Han Shin

Research output: Contribution to journalReview articlepeer-review

15 Scopus citations

Abstract

This paper examines the effects of geographic sources of competitive advantage on firm value among publicly traded pharmaceutical companies in the United States. A central argument is that firm value responds positively to geographic factors. We hypothesize that firm value is influenced by the degree of industry clustering, university and industrial R&D spending, the presence of related or supporting industries, and the proximity of competitors. The empirical results lend support to our hypotheses. Even after controlling for the firm value determinants used by Fama and French (1998), geographic variables explain a significant part of the cross-sectional variation in firm value.

Original languageEnglish
Pages (from-to)2465-2495
Number of pages31
JournalJournal of Business
Volume78
Issue number6
DOIs
StatePublished - Nov 2005

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