40

Is technological race a relevant framework to describe the pharmaceutical industry or are technological spillovers so strong as to attenuate the rivalry between firms? An event study on the announcements of technological and regulatory successes shows that on average, the stockmarket returns diminish when rivals make technological progress, which is in accordance to the technological race framework. Hence, the abnormal returns of firms with a declining technological leadership are negative and significant. Yet, the returns of the firms lagging behind in the technological are not affected by their competitors’ success. Classification JEL: L25, L65, O31.