The impact of the pharmaceutical industry on the innovation performance of European countries

Regional Statistics. 2023. Vol. 13. No. 1. P. 94–118.

Nagy S., Sergey U. Chernikov, Ekaterina Degtereva

There are significant differences in innovation performance between
countries. Additionally, the pharmaceutical sector is stronger in some countries than
in others. This suggests that the development of the pharmaceutical industry can
influence a country's innovation performance. Using the Global Innovation Index
(GII) and selected performance measures of the pharmaceutical sector, this study
examines how the pharmaceutical sector influences the innovation performance of
countries from the European context. The dataset of 27 European countries was
analysed using simple, and multiple linear regressions and Pearson’s correlation. Our
findings show that only three indicators of the pharmaceutical industry–
pharmaceutical Research and Development (R&D), pharmaceutical exports, and
pharmaceutical employment–explain the innovation performance of a country largely.
Pharmaceutical R&D and exports have a significant positive impact on a country's
innovation performance, whereas employment in the pharmaceutical industry has a
slightly negative impact. Additionally, global innovation performance has been found
to positively influence life expectancy. We further outline the implications and possible
policy directions based on these findings.

Keywords: Europe, life expectancy, pharmaceutical industry, R&D, Global Innovation Index, innovation performance