| Pakistan has one of the biggest pharmaceutical industries in the world with over 600 companies under the Drug Regulatory Authority of Pakistan(DRAP),a newly set up authority which regulates the pharmaceutical companies and attempts to enable transparent Technology Transfer in the country from rest of the world as Pakistan’s pharmaceutical industry has achieved mass production and now focuses on innovation to become more competitive for global exporting.How to push innovation transfer of pharmaceutical sector becomes critical problems for government and companies.While a number of studies have been documented on innovation in pharmaceutical sector around the world,the literature and data involving Pakistan is scant,in particular,lack of research regarding the innovation types,and their relative performance in the industry.This means that the research is needed that gauges the Innovation types,and their performance in the industry while simultaneously factoring accessibility to finance,which play an important role in both innovation-based initiatives,and Innovation Performance of both products and processes.This study has been aimed at measuring the effectiveness of Closed and Open Innovation in Pakistan’s pharmaceutical industry and its impact on Innovation Performance.Furthermore,this study shall also test the moderating role that Access to Bank Loans plays in the relationship between Open and Closed Innovation,Innovation Performance,and its sub areas such as Process Innovation Performance and Product Innovation Performance.By studying relevant literature,this paper establishes a conceptual model of the impact of open and closed innovation on innovation performance,and puts forward 12 hypotheses.A total of 206 valid questionnaires were collected through a questionnaire survey of pharmaceutical company representatives from all over Pakistan.SPSS software is used to identify the relationship between variables through correlation and regression analysis methods to test the relationship between open innovation,closed innovation,bank loan access and innovation performance.The results show that:(1)Both open and closed innovation have positive effects on innovation performance,and the impact of open innovation on innovation performance is stronger than that of closed innovation;(2)Access to Bank Loans has a moderating effect on the relationship between the two types of innovation and innovation performance,and has a greater moderating effect on the relationship between open innovation and product and process innovation performance.The study contribution is rich theory of Innovation,introduced the moderate of Access to Bank Loans and considering product and process innovation performance,and a better understanding of the role of Open Innovation and Closed Innovation and showed that they are playing a critical role in pharmaceutical firms of Pakistan.The study shows that both methods of innovation may result in smoother Technology Transfer in the country,which can lead towards innovation which can make Pakistani pharmaceutical industry more competitive in the international market.Suggestions include promotion of collaboration of R&D across industry for organizations,provision of loans to encourage R&D,and highlighting the importance of innovation across the industry,reducing tax and give more benefits by government. |
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