In this study, we combine insights from strategic management, international business, and corporate governance in order to explore the link between research intensity and degree of internationalization under different ownership structures in the context of the Indian pharmaceutical sector. We test our five hypotheses on a sample of 88 research-active Indian pharmaceutical firms, over a seven-year period (2006-2012) in a balanced panel of 616 firm-year observations. Results from our random-effects 2-SLS panel regression estimation indicate that research intensity is positively associated with the degree of internationalization, and the strength of this relationship is affected by the concentration of ownership of the pharmaceutical company. Family ownership enhances the effect of R&D expenditure on the degree of internationalization, whereas ownership by domestic financial institutions diminishes this effect. Ownership by either foreign corporations or foreign institutional investors does not significantly affect the innovation-internationalization relationship. Theoretical and practitioner implications are discussed.
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