IDEAS home Printed from https://ideas.repec.org/a/wsi/ijitmx/v17y2020i07ns0219877020500546.html
   My bibliography  Save this article

Impact of Patent Quality on Firm Performance: A Case of Indian Pharmaceutical Industry

Author

Listed:
  • Mohd Shadab Danish

    (Department of Economics, Indian Institute of Technology Indore, India)

  • Ruchi Sharma

    (Department of Economics, School of Humanities and Social Sciences, Indian Institute of Technology Indore, WS 203, Simrol, Khandwa Road, Indore Madhya Pradesh 453552, India)

  • Madan Dhanora

    (Govt. Mahaveer College, Petlawad, Jhabua, Madhya Pradesh 457773, India)

Abstract

This study examines the relationship between 287 pharmaceutical firms’ patent quality and their performance, measured by the profitability ratio and return on assets (ROA) in India. ROA measures the economic efficiency in relation to its overall resource, whereas the profitability ratio measures how much a firm can earn a profit on a rupee of sales. Based on the theoretical model, this study hypothesized that the quality of both product and process innovation positively impacts the firm performance. The quality of patent (innovation) is measured through Revealed Technology Advantage (RTA) and Relative Patent Position (RPP) in the most important technology, i.e. a technology where firms have a maximum patent. RTA measures the technological competencies in one particular technological field compared to other firms. On the other hand, RPP measures the firms leading position in a technological field compared to leader firms in that technology. The results drawn for both quality indicators (RTA and RPP) using quantile regression find significant differences among product and process innovation. Moreover, this study indicates that pharmaceutical firms should enhance their R&D capabilities and the leading position in the most important technology to increase their performance.

Suggested Citation

  • Mohd Shadab Danish & Ruchi Sharma & Madan Dhanora, 2020. "Impact of Patent Quality on Firm Performance: A Case of Indian Pharmaceutical Industry," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 17(07), pages 1-23, November.
    • Handle: RePEc:wsi:ijitmx:v:17:y:2020:i:07:n:s0219877020500546
    DOI: 10.1142/S0219877020500546
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0219877020500546
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0219877020500546?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:ijitmx:v:17:y:2020:i:07:n:s0219877020500546. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/ijitm/ijitm.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.