R&D and productivity in the Indian pharmaceutical firms

Chandan Sharma

MPRA Paper from University Library of Munich, Germany

Abstract: Recent researches for developing countries suggest knowledge generating activates is no silver bullet for productivity growth. In this context, this paper examines the impact of R&D activities on firms’ performance for the Indian pharmaceutical industry by utilizing the data of the post reform period (1994-2006). The empirical analysis is performed in two stages. In first stage, we examine the relative productivity performance of R&D vis-à-vis non- R&D. Subsequently, we construct two empirical frameworks, namely, growth accounting and production function. Results of analysis indicate that R&D firms have productivity edge over non- R&D firms. Regression results based on the growth accounting framework suggest that R&D intensity has a positive and significant effect (15%) on TFP. The results also confirm that the performance of foreign firms operating in the industry is more sensitive towards R&D than the local firms. Furthermore, the estimation results of the production function approach indicate that the output elasticity to R&D capital varies from 10% to 13%. Therefore, we support the argument that ‘manna from heaven’ impact is large and significant.

Keywords: Productivity; R&D; Indian Pharmaceutical (search for similar items in EconPapers)
JEL-codes: D24 O3 (search for similar items in EconPapers)
Date: 2011-02-12
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/31681/1/MPRA_paper_31681.pdf original version (application/pdf)

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:pra:mprapa:31681

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().