Abstract
The biotech industry is regarded as one of the most potential industries in the 20th century. The demand for the biotech technology increases as numerous countries support biology research to find cures for human diseases and improve people’s lives. Genetic engineering, recombinant protein and DNA techniques have been used to early disease detection, target treatment and disease prevention. The biopharmaceutical industry value chain is showing a long period from basic research to the market, and producing a new drug needs at least a decade and invests about three to six hundred million US dollars. Even though the high risk and uncertain, a successful product could bring ten times reward. Most of the biopharmaceutical companies in Taiwan are small-to-medium sized in capital and still in the research and development stage. In order to improve the research capabilities, knowledge exchange and technology upgrade, it's a tendency for Taiwan’s companies to develop strategic alliances with external organizations. The external cooperation networks whether have positive impact on the firm performance is one of the issues this study try to investigate. In addition, government implements various research subsidies in order to encourage firms to invest in R&D. The research also attempts to study the effects on the performance of the firms while acquiring the government research subsidies. The study adopts the questionnaires of Taiwan’s biopharmaceutical companies from the Taiwan Institute of Economic Research, and the data includes 16 firms, 33 sets of questionnaire from 2007-2011. The results show that the R&D expense has negative impact on the operating performance and R&D faculty input has no relationship with the firm performance. However, the external cooperation networks and government R&D subsidies all have positive effect on the firm performance. Besides, while conducting external cooperation networks and government R&D subsidies as moderators, the R&D input has a significantly positive impact on the performance. From the results, the study concludes that the external networks and government subsidies can help to increase and complement the internal resources and improve operating performance of Taiwan’s biopharmaceutical companies. Biopharmaceuticals industry is still on the process of the development, and has not yet established a large-scaled environment. The domestic research for the biopharmaceuticals industry in Taiwan is very rare and scarce. This study attempts to investigate the relationship between R&D investment, external cooperation networks, government R&D subsidies and the operating performance. The results provide the management implications for the biopharmaceuticals companies and also academic suggestions for the follow-up researches in the future.