An Empirical Analysis of Strategic Contracts
This article investigates the use of strategic contract clauses such as most-favored-customer clauses, rights of first refusal, rights of first offer, first negotiation rights in bio-tech R&D contracts between pharmaceutical firms and bio-tech agcnts. It is shown that these strategic rights are more likely adopted when potential entry threat from other pharmaceutical firms are larger. This result is consistent with the prediction from the literature: strategic contracts can increase the joint benefit of contracting parties by extracting rent from entrants and/or protect investments by contracting parties. Furthermore, strategic rights and termination rights held by pharmaceutical firms are shown to be substitutes, and the level of substitution is affected by the uncertainty of the R&D activities involved and the previous relationship between contracting parties. These results can be explained by a multi-task theory where bio-tech agents allocate effort between R&D activities specified in contracts and non-contracted R&D activities.
Di Guo Xinyu Hua Kun Jiang
School of Business,University of Hong Kong,Hong Kong Dept of Economics,Hong Kong University of Science and Technology,Hong Kong Dept of Economics,University of Hong Kong,Hong Kong
国际会议
The 8th Conference on Industrial Economics and Economic Theory(第八届产业经济学与经济理论国际研讨会)(IEET08)
济南
英文
33-79
2013-06-22（万方平台首次上网日期，不代表论文的发表时间）