Abstract
Using quantitative analysis, this paper aims to clarify the effects that M&A activities and technological alliance among major domestic pharmaceutical companies have on the principle determinants of innovation. In the analysis, we used data obtained from 43 companies that responded to a questionnaire targeted at major domestic pharmaceutical companies. The results of the analysis suggest the following: (1) While R&D investment and M&A activities can be seen as a substitute for each other as a strategy of major domestic pharmaceutical companies, no such complementary relationship exists between M&A activities and technological alliance. In addition, technological alliance was found to have the effect of diversifying technological opportunities. (2) In M&As among major domestic pharmaceutical companies, the focus is on the appropriability of securing exclusive rights and horizontal integration is carried out in pursuit of larger scale. In seeking appropriability exclusive rights, emphasis is placed on the “preventing patent imitation,” “securing patent royalties,” and “building profits through sales and services.” (3) In merger and integration deals among major domestic pharmaceutical companies, although the appropriability of securing exclusive rights is higher, a trade-off relationship can be seen in which diversification of technological opportunities cannot be realized. (4) In addition to horizontal M&As, major domestic pharmaceutical companies go for vertically-integrated M&A deals with the aim of obtaining biopharmaceuticals. In this research, many issues still remain to be studied. The first issue is that the sample size is only 43 in the quantitative analysis. The second issue is that the causal relationship and direct effect on innovation cannot be derived from the estimation range. Finally, the analysis of the subject companies is limited to a certain period and the performance of the companies after their M&As and technological alliance have not been pursued further.
