Article Sidebar

Submitted
March 12, 2023
Accepted
July 3, 2023
Published
July 8, 2023
Download
PDF
Statistic
Read Counter : 333 Download : 121

Downloads

Download data is not yet available.

Main Article Content

Abstract

In 2018, the Central Bureau of Statistics noted that the pharmaceutical industry grew 7.36 percent and slowed by 5.59 percent during the Covid-19 pandemic in 2020. Fluctuations in the growth of the pharmaceutical sector before and during the Covid-19 pandemic encouraged increased competition and concentration. This study examines the concentration and competition of pharmaceutical businesses listed on the Indonesia Stock Exchange from the first quarter of 2018 to the third quarter of 2020. The method used in this study is a quantitative approach with a concentration ratio model (CR) and the Hirschman-Herfindahl index (HHI). The calculation results show that the Kalbe Farma company controls over 65 percent of the market share, while 9 pharmaceutical companies contest the other 35 percent. KLBF is a company with the most sustainable competitive advantage compared to others; this can be seen from product differentiation, use of technology, and a superior market share of 65.39%. In addition, from the aspect of market competition, it shows that the pharmaceutical industry before and during the Covid-19 pandemic was in a tight oligopoly market with scores of 99.20 and 99.22. The results show the implications that pharmaceutical sector actors can carry out our policies related to competitive price competition. Another procedure is that companies must constantly observe and analyze the actions of other pharmaceutical companies in making business decisions.

Keywords

Concentration and competition pharmaceutical Industry tight oligopoly market

Article Details

License

Authors who publish with this journal agree to the terms:

Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-ShareAlike 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.

Creative Commons License

Jurnal Ekonomi Pembangunan is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License..

Author Biographies

Sunarmo Sunarmo, Faculty of Economics and Business, Al-Azhar University, Indonesia

Management

Elif Pardiansyah, Faculty of Economics and Business, Sultan Ageng Tirtayasa

Department of Islamic Economics
How to Cite
Sunarmo, S., Pardiansyah, E., & Asriyah, A. (2023). Concentration and Competition in the Pharmaceutical Sector in an Era of Challenges. Jurnal Ekonomi Pembangunan, 21(1), 39–48. https://doi.org/10.29259/jep.v21i1.20779
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX

References

  1. Ahmed, A., Chakraborty, D., & Bhattacharyya, R. (2020). The Recent Coronavirus (COVID-19) Pandemic: A Review of Issues for Indian Pharmaceutical Exports. In Foreign Trade Review, 55(3), 418-435. https://doi.org/10.1177/0015732520926329
  2. Ayati, N., Saiyarsarai, P., & Nikfar, S. (2020). Short and long term impacts of COVID-19 on the pharmaceutical sector. DARU Journal of Pharmaceutical Sciences, 28, 799-805. https://doi.org/10.1007/s40199-020-00358-5
  3. Banmairuroy, W., Kritjaroen, T., & Homsombat, W. (2022). The effect of knowledge-oriented leadership and human resource development on sustainable competitive advantage through organizational innovation’s component factors: Evidence from Thailand ’s new S- curve industries. Asia Pacific Management Review, 27(3), 200–209. https://doi.org/10.1016/j.apmrv.2021.09.001
  4. Behera, C., & Rath, B. N. (2021). The COVID-19 pandemic and Indian pharmaceutical companies: An event study analysis. Buletin Ekonomi Moneter Dan Perbankan, 24, 1–14. https://doi.org/10.21098/BEMP.V24I0.1483
  5. BPS. (2020). Laju Pertumbuhan PDB Seri 2010. Badan Pusat Statistik.
  6. Devine, M. T., & Siddiqui, S. (2023). Strategic investment decisions in an oligopoly with a competitive fringe: An equilibrium problem with equilibrium constraints approach. European Journal of Operational Research, 306(3), 1473–1494. https://doi.org/10.1016/j.ejor.2022.07.034
  7. Edeling, A., & Himme, A. (2018). When Does Market Share Matter? New Empirical Generalizations from a Meta-Analysis of the Market Share-Performance Relationship. Journal of Marketing, 82(3), 1-24
  8. Emamgholipour, S., & Agheli, L. (2019). Determining the structure of pharmaceutical industry in Iran. International Journal of Pharmaceutical and Healthcare Marketing, 13(1), 101–115. https://doi.org/10.1108/IJPHM-06-2017-0030
  9. Furtner, D., Shinde, S. P., Singh, M., Wong, C. H., & Setia, S. (2022). Digital Transformation in Medical Affairs Sparked by the Pandemic: Insights and Learnings from COVID-19 Era and Beyond. Pharmaceutical Medicine, 36(1). https://doi.org/10.1007/s40290-021-00412-w
  10. Gyimah, D., Siganos, A., & Veld, C. (2021). Effects of financial constraints and product market competition on share repurchases. Journal of International Financial Markets, Institutions and Money, 74. https://doi.org/10.1016/j.intfin.2021.101392
  11. Hoskins, J. D., & Carson, S. J. (2022). Industry conditions, market share, and the firm’s ability to derive business-line profitability from diverse technological portfolios. Journal of Business Research, 149, 178–192. https://doi.org/10.1016/j.jbusres.2022.05.026
  12. Hussain, M., Bashir, U., & Bilal, A. R. (2020). Effect of monetary policy on bank risk: does market structure matter? International Journal of Emerging Markets, 16(4), 696–725. https://doi.org/10.1108/IJOEM-09-2019-0674
  13. IDX. (2020). Laporan Keuangan Tahunan. https://www.idx.co.id/id/perusahaan-tercatat/laporan-keuangan-dan-tahunan
  14. Ipek, O., & Ipek, E. (2018). Market Structure of the Turkish Pharmaceutical Industry. Business and Economics Research Journal, 9(3), 449–462. https://doi.org/10.20409/berj.2018.116
  15. Jaloudi, M. (2019). Market Structure, Efficiency, and Performance of Jordan Insurance Market. International Journal of Business and Economics Research, 8(1), 6-13. https://doi.org/10.11648/j.ijber.20190801.12
  16. Kochakkashani, F., Kayvanfar, V., & Haji, A. (2023). Supply chain planning of vaccine and pharmaceutical clusters under uncertainty: The case of COVID-19. Socio-Economic Planning Sciences, 87, 10162. https://doi.org/10.1016/j.seps.2023.101602
  17. Lelissa, T. B., & Kuhil, A. M. (2018). The structure conduct performance model and competing hypothesis–A review of literature. Structure, 9(1), 76-89. https://doi.org/10.1007/s40199-020-00358-5
  18. Lim, H., & Rokhim, R. (2020). Factors affecting profitability of pharmaceutical company: an Indonesian evidence. Journal of Economic Studies, 48(5), 981–995. https://doi.org/10.1108/JES-01-2020-0021
  19. Mahajan, V. (2019). Structural changes and trade competitiveness in the Indian pharmaceutical industry in product patent regime. International Journal of Pharmaceutical and Healthcare Marketing, 13(1), 21–39. https://doi.org/10.1108/IJPHM-12-2016-0066
  20. Minangsari, F., Robiani, B., & Mukhlis (2019). The Efficiency of the Pharmaceutical Industry in Indonesia: A Stochastic Frontier Approach. Jurnal Ekonomi Pembangunan, 17(2): 49-58. DOI: https://doi.org/10.29259/jep.v17i2.8949
  21. Romaniuk, J., Dawes, J., & Nenycz-Thiel, M. (2018). Modeling brand market share change in emerging markets. International Marketing Review, 35(5), 785–805. https://doi.org/10.1108/IMR-01-2017-0006
  22. Saeed, A., Alnori, F., & Yaqoob, G. (2023). Corporate social responsibility, industry concentration, and firm performance: Evidence from emerging Asian economies. Research in International Business and Finance, 64. https://doi.org/10.1016/j.ribaf.2022.101864
  23. Sahile, S. W. G., Tarus, D. K., & Cheruiyot, T. K. (2015). Market structure-performance hypothesis in Kenyan banking industry. International Journal of Emerging Markets, 10(4), 697-710.
  24. Silalahi, T., Manurung, A. H., & Hidayat, Y. T. (2015). The Market Structure of The Bank, Its Performance, and the Macroprudential Policy. Buletin Ekonomi Moneter dan Perbankan, 18(1), 46-60.
  25. Sunarmo. (2018). Market Structure and Competition of Islamic Banking in Indonesia. Buletin Ekonomi Moneter dan Perbankan, 20(3), 307-324.
  26. Talpur, A. B. (2023). Market power and concentration-performance analysis of the banking sector: A comparative study of Singapore and Pakistan. Social Sciences & Humanities Open, 7(1), 100383. https://doi.org/10.1016/j.ssaho.2022.100383
  27. Vives, X. (2020). Common ownership, market power, and innovation. International Journal of Industrial Organization, 70, 102528. https://doi.org/10.1016/J.IJINDORG.2019.102528
  28. Wouters, O. J., Sandberg, D. M., Pillay, A., & Kanavos, P. G. (2019). The impact of pharmaceutical tendering on prices and market concentration in South Africa over a 14-year period. Social Science and Medicine, 220, 362–370. https://doi.org/10.1016/j.socscimed.2018.11.029

Similar Articles

<< < 1 2 3 

You may also start an advanced similarity search for this article.