Do Chinese Pharmaceutical Companies Compete With Intellectual Capital?-- Evidence from 2001 to 2013

Is Chinese pharmaceutical company behavior like a high-tech companies in market competition? This paper empirically tested data of Chinese pharmaceutical firms from 2001 to 2013, and found out that: dislike high-tech companies, Chinese pharmaceutical firms have more perception to adopt normal but frequent competitive actions rather than highly innovative moves, and they prefers to start attack or respond basing on tangible resources similarity rather than intellectual capital. The test found out only medium Chinese pharmaceutical firms perhaps have more interests on innovation and adopt deviance moves. Keywords: Pharmaceutical company, Resource Similarity, Competitive actions. 1. Introduction-tech companies have, comparing to other traditional companies, a special advantage basing on their high-tech and innovative resources and capabilities. In resource-based view, heterogeneous resources and capabilities consist of firm's sustained competitive advantages(1). Therefore generally speaking high-tech industry occur competitions which associated with technology and products innovation. But Chen (1996) argued that, firms decide to attack or respond to their competitors basing on two characters, market commodity and resources similarity(2). For market commodity, theories in market structure have proved its reliability, while resources similarity, since Chen argued, has seldom empirically examined. Chinese pharmaceutical industry, which relates to the safety and health of the nation, are high controlled by the government. Bureaucratic and policies system makes Chinese pharmaceutical firms don't have much choice in technological and products innovation. Most of Chinese pharmaceutical firms, especially SOEs, prefer to product in big scale those medicines which are almost authorized in other countries, or making Old Chinese medicines modernization. These will bring Chinese pharmaceutical firms backwards to traditional manufacturing industry, rather than a high-tech one. This paper, with testing data from Chinese successful pharmaceutical firms which listed in the Chinese stock market, attempted to analyze the competitive actions of Chinese pharmaceutical firms, and its association with the strategic resources of firm, the intellectual capital which representing the innovative capabilities, or the tangible resources.