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Strategic responses to institutional changes: 'Indigenous growth' model of the Indian pharmaceutical industry

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  • Chittoor, Raveendra
  • Ray, Sougata
  • Aulakh, Preet S.
  • Sarkar, M.B.
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    Abstract

    This paper examines the strategic response of the Indian pharmaceutical industry to the dual institutional changes arising from economic liberalization of the Indian economy and the WTO mandated intellectual property regime. An analysis of the relative position and growth of Indian firms vis-à-vis foreign multinationals, changes in the resources and capabilities of these firms, and scope in terms of product market internationalization and overseas acquisitions during the 1995-2005 period, suggests an 'indigenous growth' model in the Indian pharmaceutical industry which is in contrast to the FDI initiated growth witnessed through full or partial privatization of state-owned firms in other geographical contexts. Second, internationalization of both inputs and product markets has been the dominant mode to overcome the pressures arising from institutional changes. We discuss the drivers of this model and provide implications for future research on strategic responses to institutional changes within other industries in India as well as for comparative research across different political and institutional settings.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 14 (2008)
    Issue (Month): 3 (September)
    Pages: 252-269

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    Handle: RePEc:eee:intman:v:14:y:2008:i:3:p:252-269

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    Keywords: Organizational transformation Institutional changes Emerging economy firms Growth models India;

    References

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    Cited by:
    1. Sonia Ketkar & Zoltan Acs, 2013. "Where Angels Fear to Tread: Internationalization of Emerging Country SMEs," Journal of International Entrepreneurship, Springer, vol. 11(3), pages 201-219, September.
    2. Pallab Paul & Kausiki Mukhopadhyay, 2010. "Growth via Intellectual Property Rights Versus Gendered Inequity in Emerging Economies: An Ethical Dilemma for International Business," Journal of Business Ethics, Springer, vol. 91(3), pages 359-378, February.
    3. Lee, Jeoung Yul & Park, Young-Ryeol & Ghauri, Pervez N. & Park, Byung Il, 2014. "Innovative Knowledge Transfer Patterns of Group-Affiliated Companies: The effects on the Performance of Foreign Subsidiaries," Journal of International Management, Elsevier, vol. 20(2), pages 107-123.
    4. Guennif, Samira & Ramani, Shyama V., 2012. "Explaining divergence in catching-up in pharma between India and Brazil using the NSI framework," Research Policy, Elsevier, vol. 41(2), pages 430-441.
    5. Duysters, Geert & Jacob, Jojo & Lemmens, Charmianne & Hu, Jintian, 2008. "Internationalization and Technological Catching Up of Emerging Multinationals: A Case Study of China's Haier Group," MERIT Working Papers 052, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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