Institutional frameworks and innovation in the German and UK pharmaceutical industry

摘要

This paper analyzes how governance structures impact the innovation capabilities of leading German and UK firms in the pharmaceutical industry. Our main objective is to show how variation in national institutional frameworks influences the innovation process, and thus, relative performance. There are two main conclusions. First, the corporate governance structure allowed leading UK firms to more quickly adapt than German firms to rapidly changing external environmental conditions in the global pharmaceutical industry. Secondly, leading UK firms have an advantage in generating innovative drugs ("blockbusters") than do German firms due to the nature of the institutional framework in which they are embedded.