The Impact of Transaction Structure, Interfirm Synergies, and Motives on Performance of Interfirm Transactions in the Pharmaceutical Industry

Journal of Pharmaceutical Marketing and Management, Vol. 15, No. 1, pp. 73-95, September 2002

24 Pages Posted: 6 Jun 2010 Last revised: 30 Jul 2014

See all articles by Thani Jambulingam

Thani Jambulingam

Saint Joseph's University

Todd Saxton

Indiana University Purdue University Indianapolis (IUPUI); Indiana University - Kelley School of Business - Management & Entrepreneurship

Date Written: September 1, 2002

Abstract

This study draws on transaction cost, resource dependence, and organizational learning theories to posit relationships between transaction performance and transaction structure, interfirm synergies, and motives. The study involves analysis of 66 international and intra-national transactions (alliances and acquisitions) that were undertaken in the pharmaceutical industry. An initial survey was administered to firms involved in these transactions to gather information regarding motives, transaction structure, and interorganizational synergies. A second survey was administered two years after the transaction to gather information on transaction performance. Findings support the importance of transaction structure and strategic synergies between firms. Specifically, transaction structure and high levels of strategic fit between the firms had a positive impact on performance. There is also some evidence that synergies must be linked to the motives driving the transaction. The study yields meaningful results regarding factors leading to success of transactions (alliances and acquisitions) in a longitudinal study of intranational and international transactions.

Keywords: Alliances, Acquisitions, Synergies, Performance, Pharmaceutical Industry, Longitudinal Study

Suggested Citation

Jambulingam, Thani and Saxton, Todd, The Impact of Transaction Structure, Interfirm Synergies, and Motives on Performance of Interfirm Transactions in the Pharmaceutical Industry (September 1, 2002). Journal of Pharmaceutical Marketing and Management, Vol. 15, No. 1, pp. 73-95, September 2002 , Available at SSRN: https://ssrn.com/abstract=1619846

Thani Jambulingam (Contact Author)

Saint Joseph's University ( email )

5600 City Avenue,
Philadelphia, PA 19131
United States

Todd Saxton

Indiana University Purdue University Indianapolis (IUPUI) ( email )

1309 E. 10th St.
Indianapolis, IN 47405
United States

Indiana University - Kelley School of Business - Management & Entrepreneurship ( email )

Bloomington, IN 47405
United States

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