Is foreignness a source of competitive advantage in the Brazilian pharmaceutical industry?: an exploratory study

• Ano de defesa: 2018
• Autor(a) principal: Monteiro, Ricardo Itapema de Castro
• Orientador(a): Sheng, Hsia Hua
• Tipo de documento: Dissertação
• Tipo de acesso: Acesso aberto
• Idioma: eng
• Palavras-chave em Português: Capital de giro; Lucratividade; Indústria farmacêutica
• Palavras-chave em Inglês: Liability of foreignness; Asset of foreignness; Working capital; Profitability; Pharmaceutical industry
• Link de acesso: https://hdl.handle.net/10438/24772

The accelerated growth of pharmaceutical market in Brazil, in the past ten years, attracted and intensified investments from multinational pharmaceutical companies. National companies also invested heavily. The industry matured and competition intensified. However, a company that operates in a foreign, new environment, driven by unfamiliar competitive forces generally encounters additional costs to operate. This phenomenal is called ‘liability of foreignness’ (LOF). Still, the foreign branch of a company may also have unique advantages due to their being foreign, the so called ‘asset of foreignness’ (AOF). Do these theoretical expectations hold in the Brazilian pharmaceutical industry? The paper employs panel data methodology with fixed effects on four regression models for a sample of 22 companies (11 Brazilian subsidiaries of multinationals and 11 national companies) from this industry. Moreover, the models utilized were proved by other researchers, in different markets segments and countries. The findings support the hypothesis formulated by these scholars and suggest the existence of “Liability of Foreignness”.