Financialized Corporations in a National Innovation System: The U.S. Pharmaceutical Industry

Öner Tulum, William Lazonick · 2018 · International Journal of Political Economy

Summary. U.S. pharmaceutical companies face a productivity crisis despite favorable institutional conditions for drug development. The paper argues that financialization—prioritizing shareholder returns through stock buybacks and dividends over R&D investment—explains this paradox. Driven by stock-based executive compensation, major U.S. firms extract value for shareholders at innovation's expense, while less-financialized European competitors successfully exploit the U.S. innovation system. The authors contend that corporate governance prioritizing innovation could unlock greater pharmaceutical productivity.

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@article{tulum-2018-financialized-corporations-national-innovation-system,
  title   = {Financialized Corporations in a National Innovation System: The U.S. Pharmaceutical Industry},
  author  = {Öner Tulum and William Lazonick},
  journal = {International Journal of Political Economy},
  year    = {2018},
  doi     = {10.1080/08911916.2018.1549842},
  url     = {https://doi.org/10.1080/08911916.2018.1549842}
}

TY  - JOUR
TI  - Financialized Corporations in a National Innovation System: The U.S. Pharmaceutical Industry
AU  - Öner Tulum
AU  - William Lazonick
JO  - International Journal of Political Economy
PY  - 2018
DO  - 10.1080/08911916.2018.1549842
UR  - https://doi.org/10.1080/08911916.2018.1549842
ER  - 

Details

DOI

10.1080/08911916.2018.1549842

Countries

United States

Regions

North America

Categories

innovation-theory, regional-innovation-systems, policy, general-innovation

Added

2026-04-28