Third-World Copycats to Emerging Multinationals: Institutional Changes and Organizational Transformation in the Indian Pharmaceutical Industry
Raveendra Chittoor,
MB Sarkar,
Sougata Ray,
Preet S. Aulakh
Indian Institute of Management Calcutta, Joka, Diamond Harbor Road, Kolkata 700104, India
Department of General and Strategic Management, Fox School of Business, Temple University, Philadelphia, Pennsylvania 19122, Grenoble École de Management, 38000 Grenoble, France
Indian Institute of Management Calcutta, Joka, Diamond Harbor Road, Kolkata 700104, India
Schulich School of Business, York University, Toronto, Ontario M3J 1P3, Canada
raveendra{at}iimcal.ac.in
mbsarkar{at}temple.edu
sougata{at}iimcal.ac.in
paulakh{at}schulich.yorku.ca
This article investigates how Indian pharmaceutical firms, facing discontinuous institutional changes in their domestic environment due to economic liberalization and intellectual property reforms, have undertaken organizational transformation. Internationalization of resources and product markets constitutes an important component of organizational transformation for local firms in emerging economies. Using longitudinal data on 206 Indian pharmaceutical firms from 1995–2004, we find that firms' access to international technological and financial resources enables product market internationalization. Furthermore, we theorize and find support for our predictions that the association between international resources and markets is conditioned by time and business group affiliation, and product market internationalization affects financial performance. Several implications thus emerge for theory and practice associated with the sources of competitiveness in emerging economy firms and their transformation into globally competitive multinational firms.
Key Words: emerging multinationals; economic liberalization; business groups; resource internationalization; emerging economies; pharmaceutical industry; globalization
Copyright © 2008 by INFORMS.
