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 MPIfG Books



Andrea M. Herrmann
One Political Economy, One Competitive Strategy?
Comparing Pharmaceutical Firms in Germany, Italy, and the UK

Oxford: Oxford University Press, 2009
256 pages | ISBN 978-0-19-95434-3| $ 99,00
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Abstract | Contents | Author




This book examines how firms adapt to the pressures of increasing international competition by testing the arguments on "strategy specialization" proposed in the competitiveness literature in general, and by contributors to the "varieties of capitalism" debate in particular. If different economies are characterized by distinct institutional arrangements, successful firms would be those that exploit the related comparative advantages and specialize in the competitive strategies facilitated by national institutions.
One Political Economy, One Competitive Strategy? begins with an assessment of how many pharmaceutical firms in Germany, Italy, and the UK pursue strategies facilitated by national institutions governing the financial markets, antitrust activities, and the labor market. Quantitative analyses reveal that deviant firms, competing through institutionally unsupported strategies, outnumber conforming firms by far. Not only does this finding run counter to the expectations of the competitiveness literature, it brings up a whole new line of inquiry. How can firms compete through strategies that are not supported by national institutions? The book addresses this question and illustrates that firms do not necessarily exploit comparative institutional advantages, but that they can also circumvent institutional constraints. International markets and individual collaboration on a contractual basis allow firms to compete despite comparative institutional disadvantages. These findings suggest that trade liberalization does not lead to strategy specialization but to strategy diversification, depending on the inventiveness of entrepreneurs to develop individual approaches to compete.



Part I. Specialization in Line with Comparative Institutional Advantages?
1. Introduction
1.1. Political Economy Perspectives on Firm Competitiveness in Response to Globalization
1.2. An Analytical Framework for Studying Competitiveness
1.3. The Argument n Brief
1.4. Outline of the Book
2. Patterns of Strategy Specialization
2.1. How to Distinguish Competitive Strategies: Concepts and Operationalization
2.2. Do Firms in Germany, Italy, and the UK Specialize in the Same Strategy?
2.3. Are Competitive Strategies Mutually Exclusive?
2.4. Final Assessment
2.5. Conclusions and Outlook on Further Research
Part II. Linking Institutions, Input Factors, and Competitive Strategies
3. Linking Financial Market Institutions, Corporate Finance, and Competitive Strategies
3.1. Hypotheses as to How Different Types of Finance Facilitate RPI, DQP, and LCP Strategies
3.2. How Important Are Debt Finance and Share Capital for RPI, DQP, and LCP Strategies?
3.3. How Insider and Outsider Share Capital Impact on RPI and DQP Strategies: Competing Despite Comparative Institutional Disadvantages?
3.4. Concluding Interpretation
4. Linking Antitrust Legislation, Standards, and Competitive Strategies
4.1. Hypotheses as to How Different Standardization Processes Facilitate RPI, DQP, and LCP Strategies
4.2. How Important Are Competitive and Coordinated Standardization for RPI, DQP, and LCP Strategies?
4.3. Competing Despite Comparative Institutional Disadvantages? Competitive and Coordinated Standardization in Economies with Different Antitrust Legislation
4.4. Concluding Interpretation
5. Linking Labour-Market Institutions, Employee Skills, and Competitive Strategies
5.1. Hypotheses as to How Different Types of Employee Skills Facilitate RPI, DQP and LCP Strategies
5.2. How Important Are Different Skill Types for RPI, DQP, and LCP Strategies?
5.3. Competing Despite Comparative Institutional Disadvantages: Securing the Required Skill Profiles in Different Labour-Market Economies
5.4. Concluding Interpretation
Part III. Strategy Choice, Success, and Sustainability in Perspective
6. Excursus: Success and Choice of Competitive Strategies
6.1. Strategy Success
6.2. Strategy Choice
6.3. Concluding Interpretation

7. Conclusion
7.1. Varieties Within Capitalism: Alternative Pathways to Competitiveness
7.2. How Institutions Matter – And How They Don't
Technical Appendix



Andrea M. Herrmann received her PhD in Political Economy from the Department of Political and Social Sciences at the European University Institute (Florence) in November 2006. She also holds an MSc in European Studies: EU policy making from the London School of Economics (2002), as well a German and a French BSc in European Business and Management Studies from the European School of Business (Reutlingen) and the Ecole Superieure de Commerce (Reims). During her MSc and PhD studies, she was awarded various scholarships and research grants sponsored by the Deutscher Akademischer Austauschdienst, DAAD (2001-2005). After completing her doctoral studies she became a postdoctoral research fellow at the Max Planck Institute for the Study of Societies, Cologne (2006-2008). She also received a Minerva research grant in collaboration with the Entrepreneurship and Innovation Center of The Technion - Israel Institute of Technology, Haifa (2008-2010).

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