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Determinants of Pharmaceutical Industry’s Performance in Nigeria

Author

Listed:
  • Wakeel A. Isola

    (University of Lagos, Nigeria)

  • Ekundayo Peter Mesagan

    (University of Lagos, Nigeria)

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.

Suggested Citation

  • Wakeel A. Isola & Ekundayo Peter Mesagan, 2016. "Determinants of Pharmaceutical Industry’s Performance in Nigeria," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 14(3 (Fall)), pages 267-282.
    • Handle: RePEc:mgt:youmgt:v:14:y:2016:i:3:p:267-282
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    References listed on IDEAS

    as
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    5. Schmalensee, Richard, 1989. "Inter-industry studies of structure and performance," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 16, pages 951-1009, Elsevier.
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    Cited by:

    1. Ismaila Akanni Yusuf & Mohammed Bashir Salaudeen & Hope Agbonrofo, 2021. "Social and Economic Drivers of Stock Market Performance in Nigeria," Journal of Economic Impact, Science Impact Publishers, vol. 3(3), pages 137-143.
    2. Ekundayo P. Mesagan & Isaac A. Ogbuji & Yasiru O. Alimi & Anthonia T. Odeleye, 2019. "Growth Effects of Financial Market Instruments: The Ghanaian Experience," Working Papers 19/095, European Xtramile Centre of African Studies (EXCAS).
    3. Yusuf, Ismaila Akanni & Salaudeen, Mohammed Bashir & Agbonrofo, Hope, 2021. "Social and Economic Drivers of Stock Market Performance in Nigeria," MPRA Paper 111086, University Library of Munich, Germany.
    4. Ismaila Akanni Yusuf & Agatha Nkem Amadi & Mohammed Bashir Salaudeen, 2020. "Effects of Risk Culture and Appetite on Effective Risk Management in Nigerian Banks: Case Study of United Bank for Africa Plc," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(2), pages 81-87, June.

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    More about this item

    Keywords

    efficiency; structure-conduct-performance; pharmaceutical industry; Nigeria;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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