Modes of collaboration in open innovation practice of pharmaceutical firms in India: the analysis of survey and patent data
| DOI | https://doi.org/10.1108/JIC-04-2020-0113 |
| Published date | 14 September 2020 |
| Date | 14 September 2020 |
| Pages | 222-248 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Vinita Krishna,Sudhir K. Jain |
Modes of collaboration in open
innovation practice of
pharmaceutical firms in India:
the analysis of survey and
patent data
Vinita Krishna
General Management, SME, Shiv Nadar University, Greater Noida, India, and
Sudhir K. Jain
Economics, Jawaharlal Nehru University, New Delhi, India
Abstract
Purpose –Patents as one of the important components of intellectual capital areemerging as a new source for
mining insights on open innovation (OI) practice of the organizations. Their role in value creation through
collaboration and the inter-firm differences is yet to be explored in depth.
Design/methodology/approach –To achieve the aim, survey data is analyzed to rank OI practices
(collaboration) of the firms, while patent data are analyzed to carry out descriptive and bivariate analysis to
study the inter-firm differences in collaboration.
Findings –The survey findings highlight mergers and acquisitions (M&A) and patent pooling as the top two
preferred modes of OI, while from patent data M&A has emerged as a predominant OI practice for mainly
nonresident firms. At the firm level characteristics, out of firm age, number of granted patents and firm size,
firm age has been found to be somewhat significant in few cases of OI practices.
Research limitations/implications –It provides an alternative source, in this case patent data to study
open innovation capabilities of firms in India. There is contribution to the patent value theory from profit
motive to deriving strategic decisions on collaboration.
Practical implications –The managerial implications of this study lie in realizing granted patents as
important business tools for seeking collaboration, tracing competitive intelligence and the geography of
innovation of the firms’competitors.
Originality/value –The dataset of granted patents at the Indian Patent office (2005–2017), the sample of
pharmaceutical firms drawn from this list of patents, patent data–based OI insights and the use of multiple
imputation technique to missing data for meaningful insights are some of the unique aspects of this paper.
Keywords Intellectual capital, Mergers and acquisitions, Collaboration, Open innovation practices, Patent
data, Pharmaceutical firms
Paper type Research paper
1. Introduction
The growing importance of intellectual capital(IC) in studies based on multiple perspectives
(Hudson, 1993;Edvinsson and Malone, 1997;Sullivan, 1998;Teece, 2000) highlight the
capability of IC to create value for a company as well as be value drivers and the need to
research on value creation by the different elements of IC (Striukova, 2007). Such extensive
coverage of IC and specific reference to the knowledge assets –the intangibles –makes it a
relevant topic to research further from yet another angle –their role in open innovation (OI)
process.
There is no clear-cut theory on OI due to its embeddedness in practitioner’s base, though
scholars have been trying to link OI to some of the theories of firms.One of them is resource-
based theory (Peteraf, 1993;Hoopes et al.,2003) where heterogeneity in capabilities and
resources of firms is one of its cornerstones. This paper explores additionally the firm
JIC
23,2
222
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 15 April 2020
Revised 20 June 2020
Accepted 12 August 2020
Journal of Intellectual Capital
Vol. 23 No. 2, 2022
pp. 222-248
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-04-2020-0113
capabilitiesin the form of OI practices, usingone of their resources-intellectual capital (patents)
and their ability in creating value for the firms through collaboration at the R&D level,
importantas dimensions of IC. How firms interpretOI is quite subjectiveand helps in capturing
the heterogeneityfactor in the pharmaceutical sector takenup for study in this paper.
OI’s role in pharmaceutical industry has never being so pronounced, as in the present
times of patent expiration, fall in drug pipeline and the revenues thereof. As opposed to the
closed model (Chandler, 1977) where the entire innovative process is carried out internally by
firms, in OI, both inbound and outbound knowledge flow occur, resulting in collaborations
with several R&D actors. This results in sharing of risks, cutting costs, shorter innovation
time and the access to preferential markets.
Studies on OI were primarily based on theoretical considerations and single case studies of
leaders in pharmaceutical sector –Pfizer, GSKM and Eli Lilly (Chesbrough, 2003;West, 2006;
Hall, 2010;Sambandan et al., 2015). Mostly, the issues were analyzed in large-scale studies
(West et al., 2006) and from developed countries.
While keeping in mind the varying degree of importance of OI for different industries, this
study is conducted with a single industry focus, the usual management trend (Baseberg,
1963) to capture insights on OI from new sources like patent data and combining it with the
survey data to get a holistic view on inter-firm differences(heterogeneity) in OI practice. Their
perceptions were captured with the help of a set of eight OI practices identified from literature.
Only those firms were considered, which already had patents granted by Indian Patent Office
(IPO) between 2005 and 2017. The need to study barriers to OI implementation (Vyas et al.,
2012;Tripathi, 2016;Krishna and Jain, 2016) exists as few generic studies from developing
countries like India.
This work focuses on the collaboration dimension of OI, by investigating the extent of
R&D collaboration activities of the firms. This enlightens the managers to make intelligent
use of patents for partner search and collaboration, thus mining insights on OI. The paper is
structured as follows: Section I discusses the theoretical background, Section II lays down the
methodology, while Section III presents the findings and discussion of the results. Lastly,
Section IV summarizes the findings, with limitations and future research direction.
2. Theoretical background
2.1 Patents at the confluence of intellectual capital and resource-based view theory
Intellectual capital of an organization constitutes all the knowledge assets which together
contribute to value creation dynamics which leads to competitive edge, enhanced innovative
capacity and the overall performance of the firms. Among these knowledge assets, the
component intangibles comprising of intellectual property, more specifically the patents (in
context to the study) has accelerated the pace of innovation (Lerro et al., 2014) which along
with technological capability has been identified by Ferenhof et al. (2015) as some of the
dimensions of IC among others.
At the strategic management level, resource-based view (RBV) theory (Barney, 2001;
Wernerfelt, 1995) assumes that firms are a bundle of resources with VRIN characteristics
(V5valuable, R5rare, I5Inimitable, N5Non-substitutable) that confer competitive
advantage to the firms and are linked to their performance. Patents are one such resource.
The RBV theory proposes ways to examine, directly or indirectly, the increasing importance
of these knowledge resources for organizational performance improvements. This theory
specifies IC as one of its specific aspects. Scholars have tried to empirically test the IC-based
resources theory as a means to partially make up for the shortcomings/challenges (in terms of
its too-generic nature, nonprescriptive nature, managerial dilemma over which resources to
accumulate for competitive advantage, definition of competitive advantage and tautology) in
RBV theory.
Analysis of
survey and
patent data
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