Impact of Research and Development Strategy on Sustainable Growth in Multinational Pharmaceutical Companies

Fumio Teramae, Tomohiro Makino, Yeongjoo Lim, Shintaro Sengoku and Kota Kodama
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Fumio Teramae: Graduate School of Technology Management, Ritsumeikan University, Osaka 567-8570, Japan
Tomohiro Makino: Graduate School of Technology Management, Ritsumeikan University, Osaka 567-8570, Japan
Yeongjoo Lim: Faculty of Business Administration, Ritsumeikan University, Osaka 567-8570, Japan
Shintaro Sengoku: School of Environment and Society, Tokyo Institute of Technology, Tokyo 152-8550, Japan
Kota Kodama: Graduate School of Technology Management, Ritsumeikan University, Osaka 567-8570, Japan

Sustainability, 2020, vol. 12, issue 13, 1-15

Abstract: Research and development (R&D) productivity is continuously declining, and it is said that the conventional model of pharmaceutical business is becoming obsolete. Many research studies on R&D productivity focus on inputs (e.g., strategic transactions to absorb external innovation, R&D expenditures), outputs (e.g., approvals of a new drug), and outcomes (e.g., total sales, incomes). However, few prior studies address the relationship among these three components simultaneously. Therefore, we comprehensively analyzed factors affecting R&D productivity by statistically examining a sample of 30 large multinational companies. Our results show that strategic transactions do not increase the number of approved drugs and negatively affect growth in terms of total sales. Additionally, our results show that a home-region-oriented international strategy positively affects total sales, thus indicating that responsiveness to local medical needs is important for sustainable growth. This paper contributes to the body of research on R&D productivity in the pharmaceutical industry.

Keywords: pharmaceutical industry; R& D; strategic transactions; R& D expenditures; international strategy; strategy implementation; comparison results (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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