Japanese Pharmaceutical Firms Research Articles

Enabling or constraining? Unraveling the influence of organizational slack on innovation

We employ theories of organizational search and agency costs to propose a contingency perspective that reconciles mutually contradictory prior findings on the relationship between organizational slack and innovation. First, we argue that influences of organizational slack depend on whether we consider exploitative innovation or exploratory innovation. Further, absorbed slack and unabsorbed slack differ in their forms of relationship with innovation. The ways in which a certain type of innovation is enabled by organizational slack are conditioned by distinct modes of organizational search associated with alternative types of innovation, as well as by the extent to which effective shareholder monitoring is disturbed by different types of organizational slack. An empirical analysis of 37 Japanese pharmaceutical firms’ new product developments over a 20-year period supports our argument.

How innovators resolve the exploitation-exploration trade-off? Evidence from the Japanese Pharmaceutical Industry

Successful innovation calls for both exploitation of existing knowledge and exploration of new knowledge, or organizational ambidexterity, but we still know little about how organizations manage innovation by resolving the trade-off relationship between exploitation and exploration. We aim to address this research gap by examining the relationship between an organization’s degree of exploitation orientation and its subsequent degree of organizational ambidexterity. We argue that organizations’ exploitation orientation negatively influences subsequent achievement of organizational ambidexterity because exploitation precludes subsequent exploration. However, this trade-off relationship between prior exploitation and subsequent exploration is attenuated when organizations are characterized by problemistic search, deliberate learning, or by speciation. Accordingly, these organizations’ degree of exploitation orientation more positively influences subsequent achievement of organizational ambidexterity. Our empirical analyses of 32 Japanese pharmaceutical firms’ new product developments over 1991 to 2000 support the argument. Our findings show that organizations may increase their degree of organizational ambidexterity by resolving, rather than circumventing, the trade-off relationship between exploitation and exploration, thereby proposing an alternative explanation of ambidexterity antecedents.

Toward a Contingency Perspective on Organizational Slack: Evidence from the Pharmaceutical Industry

We employ theories of organizational search and agency costs to propose a contingency perspective that reconciles mutually contradictory prior findings on the relationship between organizational slack and innovation. First, we argue that influences of organizational slack depend on the type of innovation considered—whether we consider exploitative innovation or exploratory innovation. Further, the influences of absorbed slack and unabsorbed slack are distinct. The ways in which certain types of innovations are enabled by organizational slack is conditioned by distinct modes of organizational search associated with alternative types of innovation, as well as by the extent to which effective shareholder monitoring is ensured. An empirical analysis of 37 Japanese pharmaceutical firms’ new product developments over a 20-year period supports our argument. With these findings, hitherto unreported aspects of mutually complementary relationships between a behavioral theory of the firm and an agency theory are proposed.

Diversity management of patents in M&A - a case of Japanese pharmaceutical firms

The purpose of this study is to propose an analysis of pharmaceutical effect areas of patent data as output of research and development (R&D) activities and as resources of the firm in mergers and acquisitions (M&A). We used two M&A cases of Japanese pharmaceutical firms of the partners with different technology relatedness. It is demonstrated that M&A had a negative effect on the R&D activities of the consolidated firm of technologically heterogeneous partners. The results also show that there are no increases in the proportion of patents with the most diversified effect areas in M&A of technologically heterogeneous partners and there is an increase in another M&A of technologically homogeneous partners. It is advisable that the partner firms cooperate to manage their patents in order to maintain patents in diversified areas rather than managing their patents more diversified as a whole, in order not to have a negative effect.

R&D MANAGEMENT OF JAPANESE PHARMACEUTICAL FIRMS

We analyze how Japanese pharmaceutical firms internationalized their research and development (R&D) investments during the 1980 and 1990s. In order to tap into foreign knowledge bases, they heavily invested in setting up R&D centers abroad. However, knowledge transfer, evidenced by international patent applications, was very limited during the early phase of globalization. As a response, Japanese firms have shifted their R&D strategy toward a better organizational integration of their foreign units.

AN EMPIRICAL ANALYSIS ON ABSORPTIVE CAPACITY BASED ON LINKAGE WITH ACADEMIA

In this paper, we empirically explain how scientific knowledge assimilated from academia affects corporate performance, particularly in the pharmaceutical industry of Japan. We use balanced panel data on 46 pharmaceutical firms in Japan for the period 1992–2005. Then, we introduce a new concept, propensity to capture basic research (PCBR), to index how much scientific knowledge firms have assimilated from universities and public research institutes. We use this index to verify whether absorption of such knowledge influences corporate performance. According to econometric analysis, PCBR is positively significant for patent applications and patent efficiency but not for number of approved drugs. This obviously implies that scientific knowledge assimilated from academia is effective for technological performance in firms. Moreover, the results suggest how R&D is structured in the organizational setup of Japanese pharmaceutical firms.

Patents and performance in the Japanese pharmaceutical industry: An institution-based view

In this paper we analyze the strategic response of Japanese pharmaceutical firms to increased competitive pressure. During the 1980’s and 1990’s entry barriers were lifted and markets deregulated. As a consequence transaction structures moved from a relationship based mode towards a market based mode where competition is based on research excellence and new and innovative products. Using panel data of a sample of Japanese pharmaceutical companies, this paper discusses the effect of international patents as an indicator of research capabilities on subsequent corporate performance measured as profits on total assets. Our empirical result suggests that a firm’s patent stock is unrelated or even negatively correlated to its profitability.

Measuring the change in R&D efficiency of the Japanese pharmaceutical industry

This paper presents a data envelopment analysis (DEA)/Malmquist index methodology for measuring the change in R&D efficiency at both firm and industry levels. Letting each of ten firms in each year be a separate decision-making unit, and employing one input and three outputs in a DEA case of R&D activity input–output lag, we measure “total factor R&D efficiency” change of Japanese pharmaceutical firms for decade 1983–1992 as defined by the period of R&D input. Decomposing Malmquist index into catch-up and frontier shift components and using “cumulative indices” proposed in this study, we evaluate R&D efficiency change for each firm and empirically show that R&D efficiency of Japanese pharmaceutical industry has almost monotonically gotten worse throughout the study decade.

The Japanese Pharmaceutical Industry in Transition: Has Higher Research Orientation Resulted in Higher Market Value?

We analyze here the determinants of market value for 34 listed Japanese pharmaceutical companies between 1987 and 1998. During this period, Japanese pharmaceutical firms increased their investments in basic R&D in the process of preparing for international market expansion. We provide evidence that international patents significantly contribute to a firm's market value, expressed in Tobin's q, while publications in the scientific literature do not contribute to this value. In contrast to earlier studies on the US pharmaceutical industry, such as Gambardella (1992), our findings also suggest that in Japan a firm's publications and patents are not inter-related.

R&D Efficiency and Firm Size in the Japanese Pharmaceutical Industry

This paper investigates whether research and development (R&D) capital and firm size affect R&D output, using patent data of 37 Japanese pharmaceutical firms during 1992-2003. In this paper, count data models for panel data are used to estimate the effects of firm size on R&D efficiency. The findings indicate that there is an inverse U-shaped relationship between R&D efficiency and firm size, and R&D efficiency increases to some extent with firm size.

Perspective on the drug discovery and market landscape in Japan: can it compete in the worldwide arena?

The global pharmaceutical industry is described as facing an ‘innovation crisis’ following the ‘go-go-pharma’ era; in other words, the problem is one of ‘more money and fewer products’. Nevertheless, patients worldwide are awaiting innovative drugs. Therefore, the pharmaceutical industry has a duty to discover and develop novel drugs and medical technologies. Through universal coverage and reform of the patent system, the Japanese pharmaceutical industry has expanded greatly in line with the Japanese economy. However, in terms of scale and R&D investment, the Japanese pharmaceutical firms have lagged behind the foreign multinationals, which have undergone successive mergers and acquisitions. Meanwhile, it is true that several Japanese firms are playing an active role in overseas markets with their own blockbusters. This paper analyses and gives an overview of new trends in Japan’s pharmaceutical industry within the global context.

Does international research and development increase patent output? An analysis of Japanese pharmaceutical firms

Internationalizing research and development is often advocated as a strategy for fostering the development of technological capabilities. Although firms conduct international R&D to tap into knowledge bases that reside in foreign countries, we argue that in order to benefit from international R&D investments firms must already possess research capabilities in underlying or complementary technologies. We examine the international R&D expansion activities, research capabilities, and patent output of 65 Japanese pharmaceutical firms from 1980 to 1991. We find that firms benefit from international R&D only when they possess existing research capabilities in the underlying technologies. In addition to refining our understanding of when international R&D enhances firm innovation, our results integrate asset-seeking and asset-based theories of foreign direct investment. Internationalizing R&D to tap into foreign knowledge bases is consistent with asset-seeking theories of foreign direct investment, while the contingent nature by which firms benefit from international R&D is consistent with asset-based theories of foreign direct investment and the notion of absorptive capacity. Copyright © 2004 John Wiley & Sons, Ltd.

Alliance strategy as a competitive strategy for successively creative new product development: the proof of the co-evolution of creativity and efficiency in the Japanese pharmaceutical industry

Aimed at analyzing the continuity of core competence in a core field, the behavior of 11 Japanese pharmaceutical firms over the last two decades was analyzed. This study demonstrates that firms could maintain originality as a core competence in ongoing new product development (NPD) by utilizing a licensed alliance product as a tool for maintaining or injecting this originality. This finding was demonstrated by a comparative study of the core fields of each firm in the Japanese pharmaceutical industry.

Resilience as a source of survival stategy for high-technology firms experiencing megacompetition

A dramatic surge in information technology (IT) around the world and an evolving global economy are subjecting firms to megacompetition, thereby compelling them to develop a resilient structure for survival. The construction of a co-evolutional structure between enhancement of core competences and agile correspondence to dynamically changing external circumstances, including dynamic change in customer preferences and competitive conditions, is thus essential. While technological innovation for developing new functionality is a strategic option, given the huge risks and uncertainty indigenous to technological innovation, a high level of dependence on this process can lead to a vulnerable structure. The fluctuating nature of external circumstances can also have the same result. Thus, sustainable firm development can only be expected using systems resilience incorporating a stable innovation orbit. Prompted by this postulate, this paper attempts to identify a resilience structure for high-technology firms that are experiencing megacompetition through a comparative empirical analysis of factors governing operating income to sales for R&D intensive Japanese pharmaceutical and electrical machinery firms over the last two decades.

Japanese Firm Response to Changing Regulations: A Dynamic Strategic Group Analysis

Firms must repeatedly respond to changes in the regulatory environment. Rather than focusing only on the response of the industry as a whole, we investigate the variation in response at the firm level. We postulate and find that the firm level response will be contingent on the resource base of the firm and the firm’s degree of isomorphism to past regulatory and competitive conditions. Firms that are most isomorphic appear less able to adjust strategically to drastic environmental shifts. Using dynamic strategic group methodology, we demonstrate this response variation in a sample of Japanese pharmaceutical firms.

製薬企業における研究開発の効率性と企業価値

製薬企業における研究開発の効率性と企業価値

A Proposal for the Drug Information Demanded of Japanese Pharmaceutical Firms

A Proposal for the Drug Information Demanded of Japanese Pharmaceutical Firms

製薬企業の企業価値と研究開発

製薬企業の企業価値と研究開発

医薬品産業におけるR&D投資について

この論文においてはゲーム理論の枠組みを用いて日本の医療用医薬品市場における製薬企業の行動を分析し,その結果に基づいて製薬企業の研究開発に対する補助政策,ないしは薬剤費低減政策の研究開発誘因に対する効果を検討した。これまでの日本の製薬企業のR&Dについての研究は本質的に競争市場の仮定に基づいた実証分析が主流であり,薬価甚準制度を前提としてゲーム理論を援用したものは少なかったように思われる。それ故,この論文においては薬価基準制度が製薬企業のR&D投資に与える影響を多段階ゲームを用いて分析し,その結果をもとに製薬企業への研究開発補助政策,もしくは薬剤費削減政策の研究開発支出に対する効果を検討した。我々が得た主たる結果は,研究開発の費用に対する補助金政策は企業の研究開発支出を増大させ,一律的な薬価幅の縮小政策と研究開発型企業の薬価収載価格低下政策は研究開発支出を低下させる一方,模倣型企業の製品の薬価収載価格低下政策は研究開発型企業の研究開発支出を増大させる理論的可能性があるということであった。これらの結果は需要関数に関する仮定に依存している。それ故,この点に関する追加的な研究が必要であると思われる。

Influences on R&D growth among Japanese pharmaceutical firms, 1975–1990

In this paper, we study changes in R&D expenditure of Japanese pharmaceutical manufacturers between 1975 and 1990. The analysis contributes to our understanding of firms' R&D strategy as a dynamic process. How competitors change their relative R&D positions, more than whether differences exist at one time, has a major impact on changes in competitive strength within technology-intensive industries. Understanding the dynamics of R&D expenditure is an important element in understanding why large firms do not always stay large and why industry leaders are sometimes dislodged by innovative followers. In addition, the study is intrinsically interesting because it helps us understand the changing nature of technological competition in an important global industry. Individual firms in the pharmaceutical industry are pursuing very different R&D investment strategies. Understanding the differences is critically important if we are to understand the potential strength of the firms in the future global pharmaceutical industry.