What is it about?
What determines the locational choice investment destinations of Indian pharma companies? What are the motivations behind these outward acquisitions by Indian pharmaceutical companies? Intrigued by these questions and limited quantitative evidence on the same motivated us to study the host country locational determinants of outward FDI of Indian pharmaceutical companies considering 33 countries for the period 2000-2012 using panel regression model. Interestingly, the result suggests that strategic assets of the host country are the key determinants for the Indian pharmaceutical firms. These emerging market multinational enterprises (EMNEs) target the developed countries through the inorganic route to overcome their inadequate product development capabilities. Additionally, the findings reveal that the EMNES do not confirm to the existing mainstream theories of internationalization and instead of mere transplantation, we need to develop new theories contextualizing the emerging market multinationals. For interesting insights just peep in our study entitled "Cross-border Acquisitions and Host Country Determinants: Evidence from Indian Pharmaceutical Companies"
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Why is it important?
* Builds a case for developing new theories to explain EMNEs *Adds to the limited empirical evidence on Outward FDI by Indian pharma companies * Provides rationale of such Outward FDI by Indian pharma companies
Perspectives
* Indian pharmaceutical firms have been prompted to invest in more advanced countries to access or augment strategic assets, rather than to exploit their ownership advantages. * The study underlines that more than possessing unique ownership advantages, the Indian pharmaceutical firms have been able to leverage country-specific advantages, such as constant supply of qualified skilled professionals, a stable economy and government support, along with improved infrastructure to their advantage and have gained strength as one of the largest producers of low-cost, high-quality generic drugs. *India’s country-specific advantage is efficiency based rather than monopoly based, which has steadily made India an attractive hub for outsourcing pharmaceutical activities to include contract research, contract manufacturing and other support activities
Dr Arunima Haldar
S.P. Jain Institute of Management and Research
Read the Original
This page is a summary of: Cross-border Acquisitions and Host Country Determinants: Evidence from Indian Pharmaceutical Companies, Global Business Review, May 2016, SAGE Publications,
DOI: 10.1177/0972150916630452.
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