Scope economies in the pharmaceutical sector



The paper’s objectives are twofold: to propose an experimental simulation to measure scope economies between pairs of submarkets and to point out the role of submarkets in explaining the concentration level in the pharmaceutical market. We simulate scope economies consistent with the diversification choices of large international companies in the years 1987 and 1997. Our results suggest that: i) the random diversification (that is no scope economies hypothesis) is rejected, and ii) scope economies are significant. (JEL: C15, D21, L11, L65)


concentration diversification experimental simulation scope economies 


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© Springer 2006

Authors and Affiliations

  1. 1.Institute of Economics and StatisticsUniversity of MilanMilanItaly

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