Profitability of Indian Pharmaceutical Firms

Mainak Mazumdar ()
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Mainak Mazumdar: Centre De Sciences Humaines (CSH)

Chapter Chapter 6 in Performance of Pharmaceutical Companies in India, 2013, pp 127-144 from Springer

Abstract: Abstract Using an imbalanced panel of over 2,372 firms, in this chapter, we have examined the determinants of the profitability of Indian Pharmaceutical firms for the period 1991–2005. Our study indicates that industrial structure does not favorably create any entry barrier for firms to insulate its high profit earning from the incumbents. The analysis also indicates that firm-specific strategies like marketing or R&D intensity do not have any favorable impact on the profitability of firms. However, the interaction between R&D and marketing is one of the most successful strategies for firms. In other words, if firms can come out with new products that have some therapeutic qualities and successfully market the product , they can earn higher profit. We also find that firms that have more niche products under their commands are more profitable.

Keywords: High Profit; Entry Barrier; Export Intensity; Advertisement Expenditure; Herfindahl Index (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1007/978-3-7908-2876-4_6

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