Impact of mergers & acquisitions on research productivity within the pharmaceutical industry

Abstract

Several major econometric studies have looked at mergers and acquisitions (M&As) across various industries and concluded that, in general, there is no synergy created or released by M&A activity. This investigation concentrates upon research and development (R&D) performance in the pharmaceutical industry to examine the impact of M&A activity on corporate productivity. Findings indicate that, when compared to those companies within the pharmaceutical industry that did not experience merger activity during comparable time periods, as well as to the industry as a whole, pharmaceutical companies that merged were able to achieve more favorable post-merger productivity scores than were attained prior to their merger.