Financial crisis and the relative productivity dynamics of the biotechnology industry: Evidence from the Asia-Pacific countries

Abstract

The dynamics of the corporate-level performance growth can reflect the pattern of the firms’ reaction at the financial crisis moment. We employed the generalized metafrontier Malmquist productivity index to measure the impact of the financial crisis on the productivity of the biotechnology industry by using 68 biotechnology firms in the Asia-Pacific countries during 2001–2009. The empirical results showed that the financial crisis did not significantly impact productivity changes in the biotechnology industry in the Asia-Pacific region. This was primarily due to the improvements in efficiencies of scale and factor inputs reducing the overall impact. We observed a significant decreasing trend for technical changes in developed countries after the financial crisis. Therefore, how corporations enhance their technical innovation ability is relatively critical. The technological catch-up, the potential technological relative change, and the change in technical efficiency in less-developed countries were poor after the financial crisis. This suggests that less-developed countries should improve their technical and efficiency levels to enhance productivity.