Markets, home country ecosystem partners & value creation: a study of Indian pharmaceutical industry

Abstract

Recently scholars have started studying the locus of value creation outside the firm and how various ecosystem partners and stakeholders impact firms and markets. We expand this research agenda in the context of the Indian pharmaceutical industry by studying the interdependence between science, the entertainment sector, and finally, between firms and physicians for value creation. In the first essay, we study the scientific community's role as a complement and how science impacts the market structure and explore the heterogeneity in response to the 2010 NDM-1 crisis in antibiotic market in the Indian pharmaceutical industry using difference in difference estimation. This study expands the role of ecosystem participants by bringing in the importance of the scientific community and its interaction with the liability of foreignness. In the second essay, we explore the concept of edutainment and how the entertainment industry, through information provisioning, can help remove the stigma and lead to demand expansion and supply-side response. We explore the information providing and destigmatization role of celebrity endorsement through the study of the movie My Name is Khan and its impact on the antipsychotic drug market and how firms respond to these shocks by increasing the product differentiation to aid market expansion. Finally, in the third essay, we look at the complementarity between firms as a locus of value creation. We explore the role of risk and how it shapes firm strategies in the ecosystem. Using unique co-prescription data in the Indian pharmaceutical ecosystem, we examine the determinants of complementarity between firms and their impact on the firm’s value. Overall, our research documents the role of various ecosystem actors in value creation. We attempt to open up the black box of the industry ecosystem and, at the same time, how different actors interact with each other in the context of the Indian pharmaceutical industry