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Mergers and Acquisitions in the Pharmaceutical and Biotech Industries
This paper examines the determinants of M&A activity in the pharmaceutical-biotechnology industry and the effects of mergers using propensity scores to control for merger endogeneity. Among large firms, the authors find that mergers are a response to excess capacity due to anticipated patent expirations and gaps in a companys product pipeline.
Link
http://www.nber.org/papers/W10536