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Comparing the Efficiency and Productivity of the Indian Pharmaceutical Firms: A Malmquist-Meta-Frontier Approach

Author

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  • Mainak Mazumdar

    (Centre for Economic Studies and Policy, Institute for Social and Economic Change, Bangalore, India)

  • Meenakshi Rajeev

    (Centre for Economic Studies and Policy, Institute for Social and Economic Change, Bangalore, India)

Abstract

This paper examines the technical efficiency, technological gap ratio, and productivity change of Indian pharmaceutical firms across different groups. The groups are formed based on size, strategies, and product varieties. The analysis indicates that vertically integrated firms that produce both bulk drug and formulation exhibit higher technological innovation and efficiency. However, in contrast with popular belief, the analysis reveals that increased export earnings do not necessarily lead to higher efficiency.

Suggested Citation

  • Mainak Mazumdar & Meenakshi Rajeev, 2009. "Comparing the Efficiency and Productivity of the Indian Pharmaceutical Firms: A Malmquist-Meta-Frontier Approach," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 8(2), pages 159-181, August.
    • Handle: RePEc:ijb:journl:v:8:y:2009:i:2:p:159-181
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    References listed on IDEAS

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    Cited by:

    1. Chia-Nan Wang & Hector Tibo & Hong Anh Nguyen, 2020. "Malmquist Productivity Analysis of Top Global Automobile Manufacturers," Mathematics, MDPI, vol. 8(4), pages 1-21, April.
    2. Fernando Gascón & Jesús Lozano & Borja Ponte & David Fuente, 2017. "Measuring the efficiency of large pharmaceutical companies: an industry analysis," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(5), pages 587-608, June.
    3. Chiranjib Neogi & Atsuko Kamiike & Takahiro Sato, 2012. "Identification of Factors Behind Performance of Pharmaceutical Industries in India," Discussion Paper Series DP2012-23, Research Institute for Economics & Business Administration, Kobe University.
    4. Liao, Chun-Hsiung & Lien, Chun-Yu, 2012. "Measuring the technology gap of APEC integrated telecommunications operators," Telecommunications Policy, Elsevier, vol. 36(10), pages 989-996.
    5. Md. Abul Kalam Azad & Susila Munisamy & Kwek Kian Teng & Muzalwana Binti Abdul Talib & Paolo Saona, 2018. "Productivity Changes of Pharmaceutical Industry in Bangladesh: Does Process Patent Matter?," Global Business Review, International Management Institute, vol. 19(4), pages 1013-1025, August.
    6. Soumita Khan, 2017. "Efficiency of Indian fertilizer firms: A s tochastic frontier approach," Working Papers 396, Institute for Social and Economic Change, Bangalore.
    7. Mazumdar, Mainak & Rajeev, Meenakshi & Ray, Subhash C., 2012. "Sources of Heterogeneity in the Efficiency of Indian Pharmaceutical Firms," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 47(2), pages 191-221.
    8. Varun Mahajan & D. K. Nauriyal & S. P. Singh, 2020. "Domestic market competitiveness of Indian drug and pharmaceutical industry," Review of Managerial Science, Springer, vol. 14(3), pages 519-559, June.
    9. José Niño-Amézquita & Fedor Legotin & Oleg Barbakov, 2017. "Economic success and sustainability in pharmaceutical sector: a case of Indian SMEs," Post-Print hal-01735846, HAL.
    10. Chiu, Yung-Ho & Lee, Jen-Hui & Lu, Ching-Cheng & Shyu, Ming-Kuang & Luo, Zhengying, 2012. "The technology gap and efficiency measure in WEC countries: Application of the hybrid meta frontier model," Energy Policy, Elsevier, vol. 51(C), pages 349-357.
    11. Tulika Bhattacharya & Meenakshi Rajeev & Indrajit Bairagya, 2018. "Are high-linked sectors more productive in India? An analysis under an input–output framework," Indian Economic Review, Springer, vol. 53(1), pages 333-367, December.
    12. José Niño-Amézquita & Fedor Legotin & Oleg Barbakov, 2017. "Economic success and sustainability in pharmaceutical sector: a case of Indian SMEs," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 5(1), pages 157-168, September.
    13. Aas Mohammad & Bandi Kamaiah, 2016. "Efficiency Analysis of Indian Pharmaceutical Companies in the Post-TRIPS and Post Product Patent Regime using Stochastic Frontier Approach," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 19(62), pages 5-24, December.

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    More about this item

    Keywords

    data envelopment analysis; efficiency; global frontier; group frontier; pharmaceutical; technological gap ratio; Malmquist productivity index;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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