Efficiency and Its Determinants: Panel Data Evidence from the Indian Pharmaceutical Industry

Varun Mahajan, D. K. Nauriyal and S. P. Singh

Margin: The Journal of Applied Economic Research, 2018, vol. 12, issue 1, 19-40

Abstract: The study determines the efficiency of Indian pharmaceutical firms and its determinants in the pre- and post-product patent regime. Overall inefficiency in the industry is higher due to the inefficient conversion of inputs into output rather than through scale inefficiency. The study finds that the Product Patent Act has a negative impact on efficiency. Ownership, capital imports intensity and size variables are positively related with efficiency scores whereas age, time dummy and size square variables are inversely related. The study supports the finding that with an increase in mergers and acquisitions, a movement towards diversifying operations, the use of advanced imported foreign technology, investment in fixed assets and judicious allocation of resources for marketing activities could improve firm performance. For future policy implications, the small firms may either merge into bigger entities or manufacture pharmaceutical products for other companies, so as to raise operational scale and improve capacity utilisation. JEL Classification: C02, C61, D2, L65

Keywords: Data Envelopment Analysis; Pharmaceutical Industry; Efficiency; Patent Regime (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0973801017738416 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:mareco:v:12:y:2018:i:1:p:19-40

DOI: 10.1177/0973801017738416

Access Statistics for this article

More articles in Margin: The Journal of Applied Economic Research from National Council of Applied Economic Research
Bibliographic data for series maintained by SAGE Publications ().