Japanese Investment in the World Economy A Study of Strategic Themes in the Internationalisation of Japanese Industry
A Study of Strategic Themes in the Internationalisation of Japanese Industry
- New Horizons in International Business series
Chapter 14: Internationalisation of Pharmaceuticals
14. Internationalisation of pharmaceuticals OVERVIEW Over time, Japan’s changing comparative advantage has seen a decline in domestic production of price sensitive organic and inorganic chemicals and chemical ﬁbres, while the more research-intensive pharmaceuticals industry has expanded because of increased demand for medical services. The Japanese pharmaceuticals industry was an early investor in overseas markets and by 1970 had already established ﬁfteen subsidiaries for the manufacture and importation of its products outside Japan. By 2000, Japanese pharmaceutical companies had a network of 188 overseas salespromoting bases and another hundred subsidiaries involved in overseas manufacture. Expansion by ﬁrms such as Takeda and Shionogi into the United States, Europe and other markets led to rising overseas sales. By 2000, overseas sales exceeded ¥1 trillion or 20 per cent of total sales for the 30 leading manufacturers. Overseas employment exceeded 20,000 and 24 overseas research institutes had been founded in the United States, the UK and Germany (JPMA, 2004). Japanese ﬁrms initially expanded internationally through licensing agreements, joint ventures and limited overseas production and direct sales. Japanese ﬁrms have invested in the US market or sought US joint venture partners as a means of corporate survival and to access technology and ﬁnance. Many ﬁrms have sought joint ventures because of the considerable costs of developing or modifying pharmaceuticals for the Japanese market, as well as the regulatory constraints to research and innovation (2004). Some of the larger Japanese pharmaceuticals companies, such as Takeda, became more international through overseas acquisitions. By 2004, Takeda had...
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