How diversification affects vertical integration through experience in pharmaceuticals

Abstract The objective of this study is to analyze the choice between internal and external supplier at the manufacturing stage in the Brazilian pharmaceutical industry. We developed a structural equation model with hypotheses on experience, diversification, asset specificity, and vertical integrati...

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Autores principales:	Lima Nogueira,Antonio Carlos, Bataglia,Walter
Lenguaje:	English
Publicado:	Universidad Alberto Hurtado. Facultad de Economía y Negocios 2018
Materias:	governance structure strategic alliance drugs manufacturing
Acceso en línea:	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-27242018000400003
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spelling	oai:scielo:S0718-272420180004000032019-01-30How diversification affects vertical integration through experience in pharmaceuticalsLima Nogueira,Antonio CarlosBataglia,Walter governance structure strategic alliance drugs manufacturing Abstract The objective of this study is to analyze the choice between internal and external supplier at the manufacturing stage in the Brazilian pharmaceutical industry. We developed a structural equation model with hypotheses on experience, diversification, asset specificity, and vertical integration. We collected data for 1566 drugs registry, including its pharmaceutical form, therapeutic class and operation time of the firm and group. We found that the higher the experience, the lower the vertical integration in the manufacturing stage and a clear mediating effect of experience on the relationship between diversification and vertical integration. As firms advance in experience and the spread of the capabilities throughout the industry, agents concentrate activities on the relevant stages in value creation and strategically outsource the manufacturing. As the firm increases the diversification in the product portfolio, the experience favours the building of capabilities to manage the production lines and strategies for outsourcing. This result suggests a low risk for strategic alliances at the manufacturing stage.info:eu-repo/semantics/openAccessUniversidad Alberto Hurtado. Facultad de Economía y NegociosJournal of technology management & innovation v.13 n.4 20182018-12-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-27242018000400003en10.4067/S0718-27242018000400003
institution	Scielo Chile
collection	Scielo Chile
language	English
topic	governance structure strategic alliance drugs manufacturing
spellingShingle	governance structure strategic alliance drugs manufacturing Lima Nogueira,Antonio Carlos Bataglia,Walter How diversification affects vertical integration through experience in pharmaceuticals
description	Abstract The objective of this study is to analyze the choice between internal and external supplier at the manufacturing stage in the Brazilian pharmaceutical industry. We developed a structural equation model with hypotheses on experience, diversification, asset specificity, and vertical integration. We collected data for 1566 drugs registry, including its pharmaceutical form, therapeutic class and operation time of the firm and group. We found that the higher the experience, the lower the vertical integration in the manufacturing stage and a clear mediating effect of experience on the relationship between diversification and vertical integration. As firms advance in experience and the spread of the capabilities throughout the industry, agents concentrate activities on the relevant stages in value creation and strategically outsource the manufacturing. As the firm increases the diversification in the product portfolio, the experience favours the building of capabilities to manage the production lines and strategies for outsourcing. This result suggests a low risk for strategic alliances at the manufacturing stage.
author	Lima Nogueira,Antonio Carlos Bataglia,Walter
author_facet	Lima Nogueira,Antonio Carlos Bataglia,Walter
author_sort	Lima Nogueira,Antonio Carlos
title	How diversification affects vertical integration through experience in pharmaceuticals
title_short	How diversification affects vertical integration through experience in pharmaceuticals
title_full	How diversification affects vertical integration through experience in pharmaceuticals
title_fullStr	How diversification affects vertical integration through experience in pharmaceuticals
title_full_unstemmed	How diversification affects vertical integration through experience in pharmaceuticals
title_sort	how diversification affects vertical integration through experience in pharmaceuticals
publisher	Universidad Alberto Hurtado. Facultad de Economía y Negocios
publishDate	2018
url	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-27242018000400003
work_keys_str_mv	AT limanogueiraantoniocarlos howdiversificationaffectsverticalintegrationthroughexperienceinpharmaceuticals AT batagliawalter howdiversificationaffectsverticalintegrationthroughexperienceinpharmaceuticals
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How diversification affects vertical integration through experience in pharmaceuticals

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