FOREIGN INVESTMENT IN INDIAN PHARMACEUTICAL SECTOR - A FIRM-LEVEL STUDY OF OPERATIONAL, MANAGEMENT AND TECHNOLOGY EFFICIENCY

Abstract Foreign investment is widely recognized as a catalyst for economic development, as it not only injects essential capital but also facilitates technology transfer, strengthens managerial capabilities, and generates employment opportunities. These contributions collectively support long-term and sustainable growth. At the same time, an overdependence on foreign capital can create structural vulnerabilities for an economy. Against this backdrop, several researchers have explored how foreign investment influences economic and sectoral performance. India, as an emerging economy, has consistently attracted foreign investment across multiple industries, with the pharmaceutical sector being one of the most prominent recipients. The present study seeks to assess the effect of foreign investment on the operating, managerial, and technological efficiency of FDI-backed pharmaceutical companies in India. Employing regression analysis on panel data comprising five such firms over the period 2007–2025, the findings reveal that foreign investment exerts a significant and positive influence on operating efficiency, managerial efficiency, as well as technological efficiency within the Indian pharmaceutical sector.