An empirical analysis of resources in the Indian pharmaceutical industry

Purpose - The purpose of this study is to utilize the concept of resource based approach to ascertain the resources and the interactions that exist among these resources leading to differential performance in the Indian pharmaceutical industry. Based on review of the literature, the study also highlights differences among companies operating in economically developed economies and in an emerging economy in the pharmaceutical industry, in terms of resources that matter. Design/methodology/approach - Panel data ranging from 2005‐2010 comprising of the listed companies from the Indian pharmaceutical industry is analyzed using random effects regression technique. Findings - The analysis reveals company age and the interaction of R&D expenditure with MD experience are significantly related to performance. Further, the analysis reveals a negative relationship of R&D expenditure with performance in two out of the four models and marketing expenditure is found to have no significant impact on performance. Practical implications - The paper helps managers understand the resources they should build upon to improve performance. Originality/value - The paper adds to existing literature on the resource based research in India, where the application of the concept is less prevalent.