Efficiency and productivity in the process and product patent regimes: empirical evidence from the Indian pharmaceutical industry

This paper examines the technical efficiency and productivity of 81 firms of the Indian pharmaceutical industry. The study found that technical efficiency and productivity are higher in the product patent regime than in the process patent regime. The analysis of Malmquist productivity index indicates that despite regression in technical change, firms' productivity improved as a result of technical efficiency gains. The results of three-stage data envelopment analysis identified firm-specific factors, such as age, R%D intensity, ownership, capital imports and foreign direct investment as the determinants of technical efficiency. This paper adds to the limited literature on technical efficiency and productivity in the context of the introduction of the product patent regime in India.