PurposeThis study aims to investigate the moderating effect of market characteristics on the relationship between innovation capabilities and export performance of Indian pharmaceutical firms.Design/methodology/approachThe authors test the hypotheses using generalized least square estimator with random effects, on a panel data set, for the period 2010–2016.FindingsAnalyses of the data show that innovation capabilities lead to superior export performance. R&D investment positively affects export performance of both developing and developed countries, whereas patent quality negatively affects the export performance of developed countries and has no significance in developing countries. Size of the firm has significant positive effect on its export performance.Originality/valueThis study explores the role of market characteristics in determining the relationship between innovation and export performance, which has mostly been ignored in extant literature, especially in the context of emerging market multinationals.
Indian pharmaceutical EMNEs, with significant cost competitiveness, have the potential to partially address the vexing problems of global healthcare industry, including rising cost of the healthcare. In this context, we explore the Critical Success Factors (CSFs) of the pharmaceutical industry, which can help firms focus their resources sharply to break-out faster. Using case study method, we studied two global dominant firms for identifying industry CSFs. Product innovation capabilities emerged as the most important CSF, having the potential to provide competitive advantage for long-term competitiveness of the firms. Other two factors that emerged as CSFs are marketing capabilities and financial capabilities. The study contributes to the literature by linking the success factors to firm capabilities and also specifically to international business literature of EMNE capability building. The study also has implications to practitioners in strategic decision making.
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