ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Intellectual Property Rights Regimes: Comparison of Pharma Prices in India and Pakistan

Almost all earlier studies comparing pharmaceutical prices in Pakistan and India have attributed higher prices in Pakistan mainly to the differences in the intellectual property rights regime between the two countries. That Pakistan permits product patents while India does not is factually incorrect. This paper argues that a weak patent regime combined with policies to reduce market concentration, curb monopolies and encourage bulk drug production, initially through public sector investments, and the size of the Indian market could have led to development of indigenous process capabilities. Meanwhile, in Pakistan, the same patent policy was not combined with policies adopted in India and since the market size is much smaller, it did not have the same effect.

Productivity in Indian Chemical Sector

The present study attempts to test the assumption of homogeneity of the sub-sectors in an industry with particular reference to the Indian chemical industry. The impact of economic reforms on the productivity levels of an industry at the aggregate and sub-sectors level do vary significantly. While the net impact of the reform process on total factor productivity growth was found to be poor at the aggregate level, the sub-sectors - drugs and pharmaceuticals and paints and varnishes, basic chemicals and dyes and dye stuff industries - greatly benefited from the liberalisation process. Within the sub-sectors, the worst affected was the fertiliser industry as the TFPG declined significantly in the post-reform period. In the same way, the productivity differentials are found at the firm level as well. While small firms experienced a fall in productivity levels during the post-reform period, the large firms could raise productivity. The differences in the productivity levels of small and large firms and among the sub-sectors within an industry reveal the heterogeneity of the industry.

Corporate Governance Codes in India

The debate on corporate governance in India derives significantly from Anglo-American experience, practice and literature. Indian CG codes based on the US and UK experience do not resolve specific governance issues plaguing Indian firms. In spite of best efforts to assimilate and apply international CG practices, the values embedded in our national culture have resulted in their desultory implementation. The article highlights those areas where Indian CG practices have diverged from international best practices and how these areas are proving to be challenges in promoting good governance culture in India.

Innovation Systems in India's IT Industry

The stellar performance of India's information technology sector has been acclaimed worldwide. Although India's export success in IT is widely attributed to its human capital, it is not clear whether this has also been accompanied by industry-wide innovation. This paper explores the innovative behaviour of firms in the IT sector. Although substantial efforts have been made over the past 50 years by the government in implementing various policy measures, building institutions, and putting strong emphasis on higher education, there has been a systemic failure to promote the emergence of networks of innovation. This, in turn, has impeded the innovation performance of the IT industry. There is a need to direct policy to address this systemic failure and bring in industry-wide innovation.

Competition in Indian Manufacturing Industries

This paper devises an improved turnover index and applies it to examine the mobility of firms in the Indian manufacturing sector during the post-reform period. The new index is used to test the stability of size ranks and analyse the changes in the degree of mobility. The paper studies the change in size distributions of industries and their inter- and intra-class mobility, and tests for the relationship between the dynamic index of competition and the direction of mobility of firms among manufacturing industries.

Industrial Sickness: Trends and Patterns

This paper attempts to trace the trends and pattern in industrial sickness during the pre- and post-reform periods, especially in the large and medium sector. The study shows that while the first period (the 1980s) was dominated by an ailing small-scale sector, the post-reform period (the 1990s) was one of sickness in the large and medium sector. The onset of recession in 1997 had an apparent immediate effect on non-SSI sickness, but its effects on the small sector were visible only after a two-year lag, indicating perhaps the greater resilience of SSIs.

Restructuring of SLPEs in India

Between 1991-92 and 2002-03, state level public enterprises continued to incur net losses and showed the chronic tendency of accumulating losses. The paper provides an overview of SLPEs in India, in terms of various financial parameters, followed by a discussion of the privatisation scenario and the different practices of states in this regard. The differentiating features of the privatisation of SLPEs vis-à-vis central public enterprises are outlined to highlight the challenges states face in retaining their portfolios of SLPEs.

Executive Compensation, Firm Performance and Governance

This paper investigates the determinants of executive compensation using the most recent data on firm performance, corporate governance and managerial compensation from a large sample of Indian firms. A linear regression model is used to develop explanations for total chief executive officer compensation and the proportion of incentive pay that forms a part of the CEO's compensation. It is found that firm size is a significant determinant of both these aspects of CEO compensation. The results also show that CEOs who are promoters of their firms earn significantly more than their ordinary counterparts. Such individuals also earn a much larger component of their compensation as incentive pay. In addition, this study also quantifies the significant divergences in compensation policies between private and public sector firms.

Does Openness Promote Competition?

This paper uses firm level data for the period 1989-2001 to analyse the working of competition in India's manufacturing sector. It examines the impact of greater competition on profit mark-up over the last decade. The econometric analysis of the factors determining markup indicates that, contrary to received wisdom, trade openness by itself does not act to reduce the profit mark-up. The paper also investigates the degree of competitiveness defined as the Lerner price-cost margin. The analysis indicates that the estimated margins are in general high over the 1990s across all industries and in most of the industries considered these margins have been increasing over the second-half of the 1990s. The market by itself does not bring about competitive outcomes. The regulatory agencies probably have a crucial role to ensure a level playing field.

Trends and Determinants of Private Corporate Sector Savings in India

The corporate savings rate in India has remained at a relatively low level throughout the long period of 1966-2000 and has, in fact, declined in the recent past, which is a worrisome matter if the planned high rate of economic growth with stability is to be achieved. It appears that profits after tax, investment opportunities, availability of external funds, cost of borrowings and cost of equity are the important determinants of the savings of the private corporate sector in India. This paper analyses the trends in private corporate savings in India during this period, and uses dynamic panel data for empirically identifying the factors which influence corporate savings decisions. The period analysis has also been carried out to gauge the impact of liberalisation on the behaviour of corporate savings in India.

Survival of Aligarh Lock Manufacturing Industry

The economic reforms have had profound implications across enterprises and industries, affecting the labour market, technical progress, productivity, work organisation, skill profiles, industrial relations and labour standards. Small-scale industries are probably affected most by these ongoing changes. This article examines the impact of globalisation on one such small-scale industry, lock manufacturing in Aligarh.

Pharmaceutical R&D for Low-Income Countries

Has the current portfolio of public, non-profit and private sector research initiatives, together with the extension of stronger intellectual property rights, been associated with any discernible change in broad based measures of R&D activity targeted at poor country markets? This paper is a follow-up to a 2001 baseline study of existing and historical R&D patterns and it revisits and updates the statistical series and reports on a second wave of R&D activity by Indian pharmaceutical firms. Taken as a whole, the various data sources examined in the paper point to a steady increase in pharmaceutical inventive activity in some areas of specific interest to developing countries. The set of diseases still in need of better low-cost treatments has seen a trend increase in its share of patenting and bibliometric citation. While overall investment in pharmaceutical R&D in India surged over the past five years, it became less targeted towards the health needs of the developing world.

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