Determinants of Internationalization as Levers for Sustainability: A Study of the Portuguese Pharmaceutical Sector
Abstract
:1. Introduction
2. Background
2.1. Pharmaceutical Industry
2.2. The Internationalization of Pharmaceutical Companies
2.3. The Portuguese Pharmaceutical Industry
3. Theoretical Framework
3.1. Determinants of Pharmaceutical Industry Internationalization
3.1.1. Internationalization Strategic Orientation
3.1.2. Competitive Advantages
3.1.3. Barriers in the Process of Internationalization
3.1.4. Entry Mode Selection
3.1.5. The Role of R&D
3.1.6. Internationalization Performance
3.1.7. Research Framework
4. Methodology
4.1. Methodological Options
4.2. Questionnaire and Scales
4.3. Sampling Process
5. Findings
5.1. Descriptive Analysis
5.2. Hypotheses Confirmation
5.2.1. International Strategic Orientation
5.2.2. Competitive Advantages
5.2.3. Internationalization Barriers
5.2.4. Entry Mode Selection
5.2.5. The Role of R&D
6. Discussion
7. Conclusions, Limitations, and Future Directions
Author Contributions
Funding
Acknowledgments
Conflicts of Interest
Appendix A
Reference | Study Type | Object of Study | Internationalization Theory | Sample (Companies) | Internationalization Determinants |
---|---|---|---|---|---|
Fina and Rugman (1996) [12] | Empirical | Internationalization Strategies | Uppsala | 1 | EM, IB |
Buckley and Chapman (1997) [11] | Empirical | Internationalization Strategies | Uppsala | 10 | ISO |
Javalgi and Wright (2003) [13] | Conceptual | Entry Mode | EM, IB, ISO | ||
Chittoor and Sougata (2007) [14] | Empirical | Internationalization Strategies | Cluster Analysis | 40 | CA |
Kuntluru et al. (2012) [15] | Empirical | Internationalization Strategies | Life Cicle | 103 | EM |
Wrona and Trapczynski (2012) [7] | Empirical | Internationalization Strategies | OLI | 5 | CA, EM, IB |
Chitour (2013) [16] | Conceptual | Entry Mode | EM, IB | ||
Mowla et al. (2014) [17] | Empirical | Internationalization Strategies | OLI | 1 | EM |
Campins (2015) [18] | Empirical | Internationalization Strategies | Uppsala Resources and Capacities | 2 | EM |
Barbosa et al. (2016) [19] | Empirical | Internationalization Strategies | Resources and Capacities | 163 | IB |
Diaz et al. (2017) [20] | Empirical | Internationalization Strategies | 1 | CA | |
Pereira and Gomes (2017) [21] | Empirical | Internationalization Strategies | OLI Uppsala | 4 | EM |
Rentala et al. (2017) [22] | Empirical | Export performance | 23 | CA | |
Teramae et al. (2020) [23] | Empirical | Internationalization Strategies | 30 | ISO |
Appendix B
Variable | Dimension | Items | Comments | Scale |
---|---|---|---|---|
Internationalization Strategic Orientation (ISO) [43,59] | 1 | Do managers have an effective “international mindset” or do they replicate the “local strategy” on foreign markets. 1: Focus on local market; 2: Focus on foreign markets. * | Nominal, two point | |
Entry Mode (EM) [61] | 1 | Strategies for penetrating foreign markets. 1: no direct financial investment (export and licensing); 2: direct financial investment (Joint ventures, direct investment) * | Nominal, two point | |
Competitive Advantages (CA) [48] | Cost (CCA) | 2 | Capture the different competitive advantages and their relevance for international activity. 1: Fully disagree;…; 4: Neither disagree or agree;...; 7: Fully Agree * | Ordinal, seven-point Likert |
Service (SCA) | 5 | |||
Product (PCA) | 3 | |||
Internationalization Barriers (IB) [51] | Internal (IIB) | 6 | Captures the main barriers for internationalization and whether these are internal or external to the company. 1: Fully disagree;…; 4: Neither disagree or agree;...; 7: Fully Agree * | Ordinal, seven-point Likert |
External (EIB) | 6 | |||
Years of International Activity [46,48] | 1 | 1: <5 years; 2: 5–10 years; 3: 11–15 years; 4: 16–20 years; 5: 21–25 years; 6: 26–30 years; 7: >30 years | Ordinal, seven point | |
Countries with Intern. Activity [46,48] | 1 | 1: No int. activity; 2: <10 countries; 3: 10–20 countries; 4: 21–30 countries; 5: 31–40 countries; 6: 41–50 countries; 7: >50 countries | Ordinal, seven point | |
Yearly Turnover [61] | 1 | 1: <25 M€; 2: 26–50 M€; 3: 51–75 M€; 4: 76–100 M€; 5: 101–150 M€; 6: 151–200 M€; 7: >200 M€ | Ordinal, seven point | |
% International business turnover [46,48] | 1 | 1: <15%; 2: 15–30%; 3: 31–45%; 4: 46–60%; 5: 61–75%; 6: 76–90%; 7: >90% | Ordinal, seven point | |
Total number of Employees [61] | 1 | 1: <50; 2: 51–100; 3: 101–200; 4: 201–300; 5: 301–400; 6: 401–500; 7: >500 | Ordinal, seven point | |
% International business employees [46,48] | 1 | 1: <15%; 2: 15–30%; 3: 31–45%; 4: 46–60%; 5: 61–75%; 6: 76–90%; 7: >90% | Ordinal, seven point | |
R&D Investment [14] | 1 | % Total turnover attributed to R&D investment. 1: <6%; 2: 6–8%; 3: 9–11%; 4: 12–14%; 5: 15–17%; 6: 18–20%; 7: >20% | Ordinal, seven point | |
Main International Activity | 1 | 1: innovative products; 2: commodities/others | Nominal, two point |
Appendix C. Variable’s Questionnaire
Appendix D
Hypothesis | Test | Result | Hypothesis Validation |
---|---|---|---|
H1a. Different ISOs have different levels of turnover | Mann–Whitney | U = 0.500 p = 0.042 | Yes |
H1b. Different ISOs have different levels of international business’ turnover | Mann–Whitney | U = 1.500 p = 0.086 | No |
H2a. Companies with more CA are associated with a bigger turnover | Spearman’s Correlation | rs = 0.313 p > 0.05 | No |
H2b. Companies with more CA are associated with bigger international business’ turnover | Spearman’s Correlation | rs = 0.693 p < 0.05 | Yes |
H2c. Companies with more CA are associated with an ISO focused on foreign markets | Mann–Whitney | U = 1.000 p = 0.047 | Yes |
H3a.Companies with more IB are expected to have less international business’ turnover | Spearman’s Correlation | rs = −0.717 p < 0.05 | Yes |
H3b.Companies with more IB are expected to have less CA | Spearman’s Correlation | rs = −0.785 p < 0.01 | Yes |
H3c.Companies with less IB are expected to have ISO’s focused on foreign markets | Mann–Whitney | U = 4.000 p = 0.273 | No |
H4. IEM corresponds to ISO’s focused on foreign markets | Mann–Whitney | U = 6.000 p = 0.453 | No |
H5.Large R&D investment is associated with bigger international business’ turnover | Spearman’s Correlation | rs = 0.650 p < 0.05 | Yes |
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2018 | 2019 | 2020 | ||||
---|---|---|---|---|---|---|
Sales | M.S.% | Sales | M.S.% | Sales | M.S.% | |
North America | 433,262 | 44.7% | 457,197 | 44.4% | 478,676 | 45.3% |
Europe | 215,882 | 22.3% | 229,876 | 22.3% | 240,379 | 22.7% |
China | 105,859 | 10.9% | 115,607 | 11.2% | 103,408 | 9.8% |
Japan | 72,429 | 7.5% | 73,973 | 7.2% | 72,732 | 6.9% |
Latin America | 36,140 | 3.7% | 39,130 | 3.8% | 44,001 | 4.2% |
Portugal | 3670 | 0.4% | 3860 | 0.4% | 3945 | 0.4% |
Rest of World | 102,262 | 10.5% | 110,555 | 10.7% | 114,582 | 10.8% |
World | 969,504 | 100% | 1,030,199 | 100% | 1,057,723 | 100% |
Mean Yearly Value% | 2008–2010 | 2011–2013 | 2014–2016 | |
---|---|---|---|---|
Export Intensity (1) | PT | 14.0 | 17.9 | 19.5 |
PPI | 42.8 | 62.5 | 85.7 | |
Coverage rate of imports by exports (2) | PT | 70.9 | 87.8 | 90.3 |
PPI | 22.9 | 31.6 | 40.6 | |
Import penetration rate on the domestic market (3) | PT | 18.7 | 19.9 | 21.1 |
PPI | 76.5 | 84.1 | 93.7 |
Variable/Dimension | No. Items | Mean | Median | SD |
---|---|---|---|---|
International Strategical Orientation (ISO) | 1 | 1.80 | 2.00 | 0.42 |
Entry Mode (EM) | 1 | 1.20 | 1.00 | 0.42 |
Competitive Advantages (CA) | 10 | 4.40 | 4.00 | 0.84 |
Cost Competitive Advantages (CCA) | 2 | 4.20 | 4.00 | 0.92 |
Service Competitive Advantages (SCA) | 5 | 4.50 | 4.50 | 0.85 |
Product Competitive Advantages (PCA) | 3 | 3.90 | 4.00 | 0.74 |
Internationalization Barriers (IB) | 12 | 4.40 | 4.50 | 0.97 |
Internal Internationalization Barriers (IIB) | 6 | 4.10 | 4.00 | 1.10 |
External Internationalization Barriers (EIB) | 6 | 4.80 | 5.00 | 0.79 |
Years of International Activity | 1 | 5.00 | 4.50 | 1.25 |
Countries with International Activity | 1 | 6.20 | 7.00 | 1.40 |
Yearly Turnover | 1 | 5.00 | 5.00 | 2.00 |
% Turnover from international business | 1 | 4.60 | 4.50 | 1.90 |
% Turnover to R&D | 1 | 4.20 | 4.00 | 2.39 |
Total number of Employees | 1 | 6.20 | 7.00 | 1.03 |
% Employees to international business | 1 | 2.20 | 1.50 | 1.93 |
Main International Activity | 1 | 1.80 | 2.00 | 0.42 |
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Vieira, J.; Frade, R.; Ascenso, R.; Martinho, F.; Martinho, D. Determinants of Internationalization as Levers for Sustainability: A Study of the Portuguese Pharmaceutical Sector. Sustainability 2021, 13, 9792. https://doi.org/10.3390/su13179792
Vieira J, Frade R, Ascenso R, Martinho F, Martinho D. Determinants of Internationalization as Levers for Sustainability: A Study of the Portuguese Pharmaceutical Sector. Sustainability. 2021; 13(17):9792. https://doi.org/10.3390/su13179792
Chicago/Turabian StyleVieira, Jorge, Rui Frade, Raquel Ascenso, Filipa Martinho, and Domingos Martinho. 2021. "Determinants of Internationalization as Levers for Sustainability: A Study of the Portuguese Pharmaceutical Sector" Sustainability 13, no. 17: 9792. https://doi.org/10.3390/su13179792