Does Pharmaceutical Industry Boost Economic Growth? A Competitiveness-Related Approach

Authors : Gönül Muratoğlu

Pages : 296-314

View : 14 | Download : 6

Publication Date : 2017-10-31

Article Type : Research

Abstract :Pharmaceutical industry is an important source of growth and competitiveness in many advanced economies, especially in USA, Japan and several European countries. However related literature is scarce, there are only a few studies which have analyzed the relationship between growth and pharmaceutical industry from a trade-related perspective. This study aims to analyze the relationship between pharmaceutical industry exports and GDP. In this context, firstly the Revealed Comparative Advantage Index of all countries in pharmaceutical industry exports are calculated. This index revealed that 27 countries in the world are specialized in pharmaceutical exports by 2014. Then, panel data models are specified to test the relationship between pharmaceutical industry exports and GDP & GDP per capita in these countries for 2000-2014 period. Results indicate that pharmaceutical exports of these specialized countries effect both GDP and GDP per capita positively. High levels of export competitiveness in this particular industry which heavily relies on the discovery and production of new drugs/medical products also contribute to the advancement of economy. 
Keywords : Pharmaceutical Industry, Export Competitiveness, GDP, Panel Data