Innovation, Ownership Structures And Inyernationlization: Empirical Evidence From Indian Pharmaceutical Sector

Abstract

We combine insights from international trade and corporate governance literatures to explore the link between innovation and internationalization under different ownership structures in the context of the pharmaceutical sector in India. Our contention is that investment in innovation is positively associated with export intensity, but the strength of this relationship is influenced by the type of company ownership as well as by the structural characteristics of the business group to which the firm is affiliated. Results indicate that research expenditure is negatively associated with export intensity, implying that firms in the Indian pharmaceutical sector face a trade-off between investing in innovation and investing in internationalization. Ownership structures and business group impact the relationship between research intensity- export intensity relationship.