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International Strategic Alliances for Local Market Entry: Direct Launches versus Marketing Alliances in Pharmaceuticals

  • TAKECHI Kazutaka
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    This paper investigates the determinants of international strategic alliances by pharmaceutical firms. When launching drugs onto the market, there are two choices: launching the drugs directly or forming marketing alliances including licensing agreements. Because these choices affect firm revenue structure and the international supply pattern of pharmaceuticals, the impact on world welfare is significant. We examine the determinants of supply mode choice (direct launch versus alliance) by Japanese pharmaceutical companies. Our estimation results reveal that in addition to firm heterogeneity, product - and market - specific determinants of strategic alliances are important: firms with smaller scope economies prefer alliances for drugs with less market potential when intellectual property rights protection (IPP) is strong.

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    File URL: http://www.rieti.go.jp/jp/publications/dp/08e022.pdf
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    Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 08022.

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    Length: 25 pages
    Date of creation: Jul 2008
    Date of revision:
    Handle: RePEc:eti:dpaper:08022
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