Pharmaceutical R&D Location Strategies: Jurisdiction Shopping or Institutional Entrepreneurship?

This research project is part of a wider research plan aimed at addressing some critical issues related to analyzing of how institutional frameworks impact on firm strategy, a largely debated strategic issue. The institutional perspective argues that once disparate organizations in the same line of business are structured into an actual field, isomorphism emerges as a consequence of the re-alignment between organizational and environmental characteristics (Meyer and Rowan, 1977; DiMaggio and Powell, 1983). With an emphasis on broad institutional environments and societal considerations (Meyer and Rowan, 1977; DiMaggio and Powell, 1983; Meyer and Scott, 1983; Powell and DiMaggio, 1991; Scott, 1995), institutional theory has been widely used for studying the adoption of organizational practices among organizations, as the interaction between institutions and organizations may encourage normative and mimetic isomorphism behaviors over institutional constraints. When the environment is highly regulated firms tend to homogenization through process of isomorphic change (Hawley, 1968). Firms tend to conform (Scott, 1987), driven by procedural conformity that forces organizations in the way they perform specific tasks or procedures following specific requirements that are imposed by institutions. We define institutional embeddedness as the interconnections between organizations and the institutional environment (DiMaggio and Powell, 1983). We argue that when actors are embedded in different institutional environments, they are offered the possibility to catch different institutional opportunities residing in other parts of the network. Diverse institutional spheres can represent windows in which frameworks tend to be less constraining to the actions of the firm. We aim to analyze the mechanism through which institutions and legal frameworks shape the behaviors, actions and relations among actors (Zukin and DiMaggio, 1994). Institutional forces rationalizing the environment in which the network is embedded may leverage network relations or break social ties and the consequent benefits of embeddedness (Uzzi, 1997). We focus on the research process, as it is less likely to have a clear scheduling as the outcome emerges as a result of changing conditions (Bechky, 2006) and different applicable regulations. Specifically, we aim to formulate research proposition that can be analyzed in the pharmaceutical industry, a setting characterized by institutional forces that significantly constrain actors and subjected to increasing specialization and systemic complexity We aim address the following research questions: How are institutional frameworks impacting on the formation of international networks and R&D location choices? Can international networks be the result of strategies of jurisdiction shopping? Under which circumstances do firms engage in Institutional Entrepreneurship strategies?