The Optimal Diversification Strategy in Pharmaceutical Industry

Balance-centred or Hetero-centred

Dados 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 correspondente)
Ano2021
Volume26
Fascículo2
Páginas272-295
Data de publicação2021-07-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoScience Technology and Society (JOURNAL)
Identificadores do periódicoISSN: 0971-7218 • E-ISSN: 0973-0796
EditoraSAGE Publications (PUBLISHER • US)
DOI10.1177/09717218211005616
OpenAlexW3162031940
IdiomaEN
Citações recebidas1
Referências 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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