The Effect of Foreign Owned Firms and Licensed Manufacturing Agreements on Innovation: Case of Pharmaceutical Firms in Developing Countries
Given the fact that the pharmaceutical industry is a commonly studied sector in the context of innovation, the majority of innovation research is devoted to the developed markets known by high research and development (R&D) assets and intensive innovation. In contrast, in developing countries where R&D assets are very low, there is relatively little research to mention in the area of pharmaceutical sector innovation, characterized mainly by two principal elements which are the presence of foreign-owned firms and licensed manufacturing agreements between local firms and multinationals. With the scarcity of research in this field, this paper attempts to study the effect of these two elements on the firms’ innovation tendencies. Other traditional factors that influence innovation, which are the age and the size of the firm, the R&D activities and the market structure, revealed in the literature review, will be included in the study in order to try to make this work more exhaustive. The study starts by examining innovation tendency in pharmaceutical firms located in developing countries before analyzing the effect of foreign-owned firms and licensed manufacturing agreements between local firms and multinationals on technological, organizational and marketing innovation. Based on the related work and on the theoretical framework developed, there is a probability that foreign-owned firms and licensed manufacturing agreements between local firms and multinationals have a negative influence on technological innovation. The opposite effect is possible in the case of organizational and marketing innovation.
Digital Object Identifier (DOI): doi.org/10.5281/zenodo.3607813Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 437
 E. F. Schmid and D. A. Smith, "Managing innovation in the pharmaceutical industry," Journal of commercial biotechnology, vol. 12, no.1, pp. 50–57, October 2005.
 M. Guadalupe, O. Kuzmina, and C. Thomas, "Innovation and Foreign Ownership," American Economic Review, vol. 102, no. 7, pp. 3594-3627, 2012.
 M. Bell and K. Pavitt, "Technological accumulation and industrial growth: contrasts between developed and developing countries," Technology, Globalisation and Economic Performance, pp.83-137, 1997.
 D. J. Teece, "Technology transfer by multinational firms: The resource cost of transferring technological know-how," The economic journal, vol. 87, no.346, pp.242-261, 1977.
 F. Bédécarrats, J. P. Cling, and F. Roubaud, "Révolution des données et enjeux de la statistique en Afrique. Introduction thématique," Afrique contemporaine, vol. 258, no. 2, pp.9-23, 2016.
 B. Donatien, "Poor data affects Africa’s ability to make the right policy decisions," www.theconversation.com, 2016.
 V. Casadella, L. Zeting, and U. Dimitri, "Développement économique et capacités d’innovation dans la mondialisation", Vol. 1, ISTE editions, 2015.
 OCDE, "Manuel d’Oslo: Principes Directeurs Pour Le Recueil Et L’interprétation Des Données Sur L’innovation," 3rd ed, pp. 56, 2005.
 C. Mothe, and U.N Thuc, "The link between non-technological innovations and technological innovation," European Journal of Innovation Management, vol. 13, no. 3, pp. 313-332, 2010.
 S. Dubouloz, "L'innovation organisationnelle: antécédents et complémentarité: une approche intégrative appliquée au Lean Management," Gestion et management, 2013, Thèse de doctorat. Université de Grenoble.
 J. Liouville, "Degré d'innovation et performances des entreprises : limites des recherches actuelles et nouvelles perspectives pour le management de l'innovation," Revue Française de Gestion Industrielle, vol. 25, no.1, pp. 5, 2006.
 M. Peris-Ortiz, and J. L. Hervás-Oliver, "Management innovation and technological innovation: friends or foes?," Management innovation, Springer, Cham, pp. 1-17, 2014.
 R. Griffith, E. Huergo, J. Mairesse, and B. Peters, "Innovation and productivity across four European countries," Oxford review of economic policy, vol. 22, no. 4, pp. 483-498, 2006.
 M. S. Freel, "Sectoral patterns of small firm innovation, networking and proximity," Research policy, 2003, vol. 32, no 5, pp. 751-770.
 S. Sedkaoui, "Les obstacles au processus d’innovation. Etude empirique basée sur un échantillon d’entreprises pharmaceutiques algériennes," Marché et organisations, vol. 26, no. 2, pp. 121-152, 2016.
 M. Rahmouni, and M. Yildizoglu, "Motivations et déterminants de l'innovation technologique : Un survol des théories modernes," 2011.
 L. Kim, "Organizational innovation and structure," Journal of Business Research, vol. 8, no. 2, pp. 225-245, 1980.
 W. M. Cohen, and S. Klepper, "Firm size and the nature of innovation within industries: the case of process and product R&D," The review of Economics and Statistics, pp. 232-243, 1996.
 N. Becheikh, R. Landry, and N. Amara, "Lessons from innovation empirical studies in the manufacturing sector: A systematic review of the literature from 1993–2003,"Technovation, vol. 26, no 5-6, pp. 644-664,2006.
 J. H. Love, B. Ashcroft, and S. Dunlop, (1996). "Corporate structure, ownership and the likelihood of innovation," Applied Economics, vol. 28, no. 6, pp. 737-746, 1996.
 M. Falk, "Effects of foreign ownership on innovation activities: empirical evidence for twelve European countries," National Institute Economic Review, vol. 204, no. 1, pp. 85-97, 2008.
 F. Gabsi, H. M'henni, and K. Koouba, "Innovation determinants in emerging countries: an empirical study at the Tunisian firms level," 2008. (Online at https://mpra.ub.uni-muenchen.de/58892/ MPRA Paper No. 58892, posted 26 September 2014 13:29 UTC.)
 C. J. Dahlman, B. Ross-Larson, and L. E. Westphal, "Managing technological development: lessons from the newly industrializing countries," World development, vol.15, no.6, pp. 759-775, 1987.
 M. de Cervantes, and A. Marshall, "Présentation générale: l’innovation dans les pays du Maghreb. Entre tendances prometteuses et contraintes structurelles," Marché et organisations, vol. 2, no. 26, pp. 11-18, 2016.
 S. B. Slimane, and M. Ramadan, "Le système national d’innovation dans les pays du Maghreb: entre failles structurelles et besoin de coordination et de gouvernance appropriées," Innovations, no 2, pp. 105-127, 2017.
 M. Fransman, "Conceptualising technical change in the third world in the 1980s: an interpretive survey," The Journal of Development Studies, vol. 21, no. 4, pp. 572-652, 1985.
 T. Pamukçu and M. Cincera, (2001). "Analyse des déterminants de l'innovation technologique dans un Nouveau Pays Industrialisé : une étude économétrique sur données d'entreprises dans le secteur manufacturier turc", Economie & prévision, no. 4, pp.139-158, 2001.
 D. Kesič, and A. Bertoncelj,"Importance Of Marketing Management In The World Pharmaceutical Industry," Trziste/Market, vol. 20, no. 1, 2008.
 C. Jommi, M. Otto, P. Armeni, and C. De Luca, "Market access management by pharmaceutical companies in a complex environment: The Italian case study," Journal of Medical Marketing, vol. 12, no. 2, pp. 93-103, 2012.
 A. Swanson, "Big pharmaceutical companies are spending far more on marketing than research," The Washington Post, vol.12, 2015.
 M. Mongo, "Les déterminants de l’innovation: une analyse comparative service/industrie à partir des formes d’innovation développées," Revue d'économie industrielle, no. 143, pp. 71-108, 2013.
 L. Klomp, and G. Van Leeuwen, "Linking innovation and firm performance: a new approach," International Journal of the Economics of Business, vol. 8, no. 3, pp. 343-364, 2001.
 D. Galliano, L. Garedew, and M. B. Magrini. "Les déterminants organisationnels de l’innovation produit : les spécificités des firmes agroalimentaires françaises," L’innovation dans les entreprises, Moteurs, moyens et enjeux, pp. 50-68, 2011.
 S. Divisekera, and V.K. Nguyen, "Determinants of innovation in tourism evidence from Australia," Tourism Management, vol. 67, pp. 157-167, 2018.