Title: Efficiency and productivity in the process and product patent regimes: empirical evidence from the Indian pharmaceutical industry

Authors: Ishita G. Tripathy; Surendra S. Yadav; Seema Sharma

Addresses: Department of Management Studies, Indian Institute of Technology Delhi, Vishwakarma Bhawan, Hauz Khas, New Delhi-110016, India ' Department of Management Studies, Indian Institute of Technology Delhi, Vishwakarma Bhawan, 4th Floor, Hauz Khas, New Delhi-110016, India ' Department of Management Studies, Indian Institute of Technology Delhi, Vishwakarma Bhawan, 5th Floor, Hauz Khas, New Delhi-110016, India

Abstract: This paper examines the technical efficiency and productivity of 81 firms of the Indian pharmaceutical industry. The study found that technical efficiency and productivity are higher in the product patent regime than in the process patent regime. The analysis of Malmquist productivity index indicates that despite regression in technical change, firms' productivity improved as a result of technical efficiency gains. The results of three-stage data envelopment analysis identified firm-specific factors, such as age, R&D intensity, ownership, capital imports and foreign direct investment as the determinants of technical efficiency. This paper adds to the limited literature on technical efficiency and productivity in the context of the introduction of the product patent regime in India.

Keywords: technical efficiency; productivity; India; pharmaceutical industry; Malmquist productivity index; MPI; data envelopment analysis; DEA; patent regimes; India; product patents; process patents; firm age; R&D intensity, firm ownership; capital imports; foreign direct investment; FDI; research and development.

DOI: 10.1504/IJEBR.2013.054838

International Journal of Economics and Business Research, 2013 Vol.6 No.1, pp.1 - 19

Published online: 30 Dec 2013 *

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