An empirical analysis of sustained advantage in the US pharmaceutical industry: Impact of firm resources and capabilities

The authors test a model of the relationships among firm resources, firm ca pabilities, and sustained competitive advantage between 1971 and 1989. Sust ained comparative advantage was captured by two variables: therapeutic diff erentiation and global NCEs. The results shaw that R&D and salesforce expen ditures have indirect and direct effects, respectively, on sustained compet itive advantage. Firm capabilities were differentiated into component and i ntegrative capabilities. Component capabilities were captured by the firm's internal R&D efforts and therapeutic market focus, while integrative capab ilities were concerned with the firm's ability to obtain FDA approvals and to develop radical new drugs. Findings on each of these four capabilities o n therapeutic differentiation and global NCEs are mired. The direct and ind irect effects of these resources and capabilities on therapeutic differenti ation and global NCEs suggest important managerial implications in the way firms coordinate and combine their assets so as to achieve sustained compet itive advantage. Copyright (C) 1999 John Wiley & Sons, Ltd.