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Efficiency and productivity analysis of Indian pharmaceutical industry using data envelopment analysis

Author

Listed:
  • H.S. Pannu
  • U. Dinesh Kumar
  • Jamal A. Farooquie

Abstract

In this paper, we have used data envelopment analysis (DEA) models to analyse the relative efficiency and productivity change in Indian pharmaceutical industry (IPI) between 1998 and 2007 which covers the post-TRIPS (1995) and post Indian Patent Act Amendment (2005) period. BCC DEA model and Malmquist productivity index are used to estimate the relative efficiency and productivity change of Indian pharmaceutical companies over the 10 year period. We have proposed and tested several hypotheses on the average efficiency and the productivity change of IPI to check if the indigenous and multinational companies differ in their efficiency and productivity change over the aforementioned period. Also, we have analysed the effect of firm size on several performance measures. Exploring the relationship between DEA efficiency and innovation, we find that innovative firms with R&D and patents have higher efficiency than non-innovative firms.

Suggested Citation

  • H.S. Pannu & U. Dinesh Kumar & Jamal A. Farooquie, 2011. "Efficiency and productivity analysis of Indian pharmaceutical industry using data envelopment analysis," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 10(1), pages 121-136.
    • Handle: RePEc:ids:ijores:v:10:y:2011:i:1:p:121-136
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    Citations

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    Cited by:

    1. BASHAYREH, Ala’ & ALOMARI, Mohammad W., 2021. "Analyzing The Technical Efficiency Using Data Envelopment Analysis Method: The Case Of Gulf Cooperation Council Countries," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 25(3), pages 44-55, September.
    2. Hongbo Lai & Hao Shi & Yang Zhou, 2020. "Regional technology gap and innovation efficiency trap in Chinese pharmaceutical manufacturing industry," PLOS ONE, Public Library of Science, vol. 15(5), pages 1-17, May.
    3. Jaswinder Singh & Parminder Singh, 2017. "Does TRIPS Drive to Productivity Growth in Indian Pharmaceutical Industry," Paradigm, , vol. 21(2), pages 211-228, December.
    4. Varun Mahajan & D. K. Nauriyal & S. P. Singh, 2018. "Efficiency and Its Determinants: Panel Data Evidence from the Indian Pharmaceutical Industry," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 12(1), pages 19-40, February.
    5. Varun Mahajan & D. K. Nauriyal & S. P. Singh, 2020. "Domestic market competitiveness of Indian drug and pharmaceutical industry," Review of Managerial Science, Springer, vol. 14(3), pages 519-559, June.
    6. Atta Mills, Ebenezer Fiifi Emire & Zeng, Kailin & Fangbiao, Liu & Fangyan, Li, 2021. "Modeling innovation efficiency, its micro-level drivers, and its impact on stock returns," Chaos, Solitons & Fractals, Elsevier, vol. 152(C).
    7. sethi, Kalyani & mishra, Dr. Bikash Ranjan, 2023. "An assessment of traditional knowledge-based medicine companies and western medicine companies: a comparative study of efficiency," MPRA Paper 116182, University Library of Munich, Germany.

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