Establishment, growth and decline of foreign subsidiaries in the Caribbean: A qualitative research of pharmaceutical industry in Puerto Rico since 1950-2017

This exploratory qualitative research has two main purposes: first, documenting the beginning, growth and the process of pharmaceutical subsidiaries departure from Puerto Rico and second, the evaluation of divestiture decisions of the subsidiaries in the context of the evolution that has occurred in the global pharmaceutical industry. This paper is focused on the pharmaceutical industry which is global in nature and engages in M&A activity extensively. The longitudinal ethnographic analysis is divided into two parts: first 165 cases were identified in public data information of subsidiaries established in Puerto Rico since 1950 to 2017 and second, 70 events of partial and final divestiture episodes were identified. Our results show that the divestment activities of a subsidiary cannot be evaluated as an isolated event and it is important to understand the sequences of partial divestitures that the plant may have had before its final liquidation. It is shown that the permanence of a productive cluster requires the arrival of new operations to replace the plants that are closing and if not replaced, a process of reduction of the operations in the country begins.