Why is Growth More Difficult to Achieve for Biopharmaceutical Latecomer Firms? Evidence from Taiwan

Abstract

This study examines why the growth of biopharmaceutical firms in latecomer countries such as Taiwan has been slower than that of information and communication technology (ICT) firms. Unlike prior studies which have focused on the industry-level driving forces, this study offers a firm-level perspective to examine factors driving industry growth. By utilising the DEcision-MAking Trial and Evaluation Laboratory (DEMATEL) method, we analyse data collected in questionnaires with the top managers of biopharmaceutical and ICT firms in Taiwan, both public and non-public. We then compared and contrasted our empirical findings to capture theoretical and practical insights. Our empirical results demonstrate that the entrepreneurial activities of Taiwan’s biopharmaceutical firms are weak in terms of adaptation to external institutions and the utilisation of resources while the primary drivers of growth in Taiwan’s biopharmaceutical firms are rather (internal) institutional factors than resource-based factors, especially in the emerging and early growth stages. We conclude that the challenge for the latecomers lies on the institutional entrepreneurship to enable and affect the circulation of strategic resources so as to bring the firms onto the growth and mature stages.