Pharmaceutical business ecosystem governance and new product development success

Abstract

PurposeThis current study seeks to examine the effect of pharmaceutical business ecosystem (BE) governance mechanisms on new product development and to ascertain how crucial firm coordination will be in these relationships.Design/methodology/approachAnalysis was based on 173 firms (institutions) selected from pharmaceutical BE. Various validity and reliability checks were conducted before the presentation of the actual analysis, which was conducted using structural equation modeling in Amos (v.23).FindingsFindings showed that both relational and contractual governance mechanisms had direct positive effects on new product development of keystone. These effects were, however, partially mediated by coordination among the pharmaceutical BE members.Practical implicationsThe development of COVID-19 vaccines across the globe has taught us that innovation and speedy development of pharmaceutical drugs are very essential. New product development success could however be achieved through effective coordination and proper governance mechanisms.Originality/valueBusiness ecosystem, considered a network of actors, with varying degrees of multilateral, nongeneric complementarities and nonhierarchically controlled relationship, tends to pose problems for keystones. Very limited attention has however been paid to the governance mechanisms and coordination within the BE, especially in the pharmaceutical industry, which has proved its worth in this season of COVID-19.