Determinants of Pharmaceutical Industry’s Performance in Nigeria

Wakeel A. Isola and Ekundayo Mesagan
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Wakeel A. Isola: University of Lagos, Nigeria

Managing Global Transitions, 2016, vol. 14, issue 3 (Fall), 267-282

Abstract: This study focused on the relationships amongmarket structure, efficiency and performance of the Nigerian Pharmaceutical industry. It employed market share and operational efficiency to determine the efficiency of the industry, pre-tax return on asset to measure performance, Herfindahl- Hirschman index to measure market structure. In addition, earnings per share was used in the study as control variable. Data were obtained from the Nigerian Stock Market Factbook covering 1996 to 2010. The panel ordinary least squares technique was employed in estimating the data. Thus over the course of the study, both fixed and random effect results clearly showed that efficiency hypothesis does not hold in the case of pharmaceutical industry in Nigeria. Rather, it is shown that it is structure that determines performance. Consequently, the study recommended that necessary structures must be put in place by the Federal Ministry of Health to enhance the capacity of local pharmaceutical firms in producing the desired quality and quantity drugs needed in the country. It was also recommended that efforts should be geared towards eradicating totally the importation of fake drugs in the pharmaceutical industry.

Keywords: efficiency; structure-conduct-performance; pharmaceutical industry; Nigeria (search for similar items in EconPapers)
JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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