Original scientific paper
https://doi.org/10.1080/1331677X.2022.2153374
Outsourcing of research and development and efficiency: a DEA non-parametric analysis of the contract research organisations industry
Ricardo F. Díaz
Blanca Sanchez-Robles
Abstract
Outsourcing to Contract Research Organisations (CROs) has become
a widespread practice by bio-pharmaceutical firms seeking to reduce
the costs associated with the development of new products. This
study empirically analyses the efficiency of the CROs industry by
looking at a sample of firms operating internationally over
2012–2020. We compute Data Envelopment Analysis (DEA) efficiency
scores for each firm and year. The average bootstrap efficiency in the
sample is 0.665, robust across specifications and increasing over
2012–2020. The best performing firms are PPD Australia, Centre
Recherches Biologiques and Oy Medfiles. Our results suggest that
very large and very small companies outperform the rest in terms of
efficiency, which points to the co-existence of increasing returns to
scale and niche competitive advantages in the industry.
Keywords
Contract Research Organisations; biopharmaceutical industry; non-parametric efficiency; data envelopment analysis; R&D outsourcing; Simar–Wilson
Hrčak ID:
308014
URI
Publication date:
1.9.2023.
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