A four layered R&D efficiency scan in the pharmaceutical industry: Evaluating ownership restructuring

Abstract

The key rationale of linking restructuring with efficiency deliberates upon the use of resources and skills after such restructuring. The empirical analysis in the present research facilitates in testing four hypotheses- validation of cobb-Douglas production function, absence of technical inefficiency effects, the impact of the explanatory variable, absence of hicks-neutral technical change and absence of technical progress. A second level analysis wherein an explanatory variable viz., research & development and comprehending its impact on efficiency post ownership change is also done. Additionally, the study is deepened by understanding the presence of bias in decision making post ownership change. This research extends to developing patents in the field of medicines which is one of the many dimensions where Indian Pharmaceutical Industry (IPI) needs encouragement. Furthermore, relatively unexplored areas of medicine like complex generics and biosimilars can promote IPI on the international platform due to limited competition and greater margins in this novel field.

Keywords:

• Efficiency analysis
• pharmaceutical industry
• research & development
• restructuring
• stochastic frontier analysis

JEL CLASSIFICATION:

• Code C5
• G34
• O32

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Ashima Verma

Ms. Ashima Verma is a Junior Research Fellowship (JRF) scholar at J.C. Bose University of Science and Technology, YMCA Faridabad, India. She has an experience of teaching at University of Delhi in finance. She has organized several university level events. Her area of research is finance emphasizing on merger and acquisition. She has published research papers in journals of repute. She has attended many international conferences. She has been a member of Institute of Actuaries of India.

Rachna Agrawal

Dr. Rachna Agrawal is an Associate Professor at J.C. Bose University of Science and Technology, YMCA, Faridabad, India. She is having experience of more than 20 years in academics. During these years, she has played multifaceted role in the field of teaching, research and administration. Her area of research is finance. She has published many research papers and case studies in the journals of repute. She has attended many national and international conferences. She has chaired many conference sessions and delivered key note address. She has authored one book in 2017. She is a reviewer, member of editorial board, committee chair in various journals of national and international level.