The Optimal Diversification Strategy in Pharmaceutical Industry

Balance-centred or Hetero-centred

Datos Bibliográficos

ID19450220
AutoresKeungoui Kim (0000-0002-0839-8813, University College Dublin), Junseok Hwang (0000-0003-2415-1711, Seoul National University), Sungdo Jung (0000-0001-5883-4313, SUNGDO JUNG, Korea Construction Infonet, Seoul, South Korea.), Eungdo Kim (0000-0002-2942-6588, Chungbuk National University, autor de correspondencia)
Año2021
Volumen26
Número2
Páginas272-295
Fecha de publicación2021-07-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaScience Technology and Society (JOURNAL)
Identificadores de la revistaISSN: 0971-7218 • E-ISSN: 0973-0796
EditorialSAGE Publications (PUBLISHER • US)
DOI10.1177/09717218211005616
OpenAlexW3162031940
IdiomaEN
Citas recibidas1
Referencias citadas69

Due to high uncertainty of product development and business environment, firm-level diversification has been regarded as one of the most effective methods in pharmaceutical firms. In previous study, firm-level diversification was discussed by different value chains of market, product, and technology. However, in most cases, the diversification itself was adopted in a simple manner although its property contains different aspects and the results varies depending on the diversity property of selected index. In addition, the existing approach for measuring firm’s product/market diversification using sales information distinguished by standard industry classification cannot provide direct implication as different strategies are made for market and product diversification. Therefore, this study examines the effects of firm-level diversification on business and innovation performances in pharmaceutical firms by considering (1) three diversification types: market, product, and technology, (2) clear separation between market and product diversification, and (3) two diversification perspectives: balance-centred and hetero-centred. For empirical analysis, an integrated firm-level data set combining from Medtrack, Orange Book, Compustat and Total Patent database is used. From the result, in case of market diversification, less market heterogeneity causes significant influence on business performance. For product and technology, a concentrated and greater heterogeneity of product diversification are turned out to promote business performance, while the more intensive and heterogeneous technology diversification has been shown to improve innovation performance

Business · Industrial organization · Innovation and Knowledge Management · Innovation Diffusion and Forecasting · Intellectual Property and Patents · Marketing

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