Competencies and Imitability in the Pharmaceutical Industry: An Analysis of Their Relationship with Firm Performance

In this article, measures of technological competence and imitability are developed and these variables, together with measures of marketing and regulatory competence, are tested for their impact on firm performance in the pharmaceutical industry.

Abstract

Two research questions are addressed in this article. First, does technological competence enhance firm performance. Second, does competitor imitation of firm knowledge hurt performance. The relationships between technological competence, imitability and performance are basic premises in the resource-based view, yet there has been little empirical testing of them. Measures of technological competence and imitability are developed. These variables, together with measures of marketing and regulatory competence, are tested for their impact on firm performance in the pharmaceutical industry. Imitability has a negative and significant impact on accounting and market-based performance measures. Contrary to expectations, technological competence is inversely related to market-based performance measures and positively related to accounting measures. Research and managerial implications for the findings are discussed.