Abstract

This paper contributes to the theory of subsidiary evolution in large corporations through an examination of the driving forces behind recent upgrading of process R&D activities in the Irish pharmaceutical industry. It is based on a survey of 80 pharmaceutical establishments in Ireland and a follow-up set of 52 semi-structured, face-to-face interviews with senior staff at 12 of the surveyed establishments carried out in 2006. We show that vigorous growth is occurring in the incidence of process R&D activity among manufacturing subsidiaries of transnational pharmaceutical firms located in Ireland. The paper supports the utility of a multi-level systems perspective on subsidiary evolution as proposed by Tavares (2001). The external environment, internal (corporate) environment and subsidiary drivers are seen to drive upgrading in a systemic way, whereby various drivers mutually interact, co-evolve and operate through each other. In further support of Tavares, the primary drivers for the subsidiaries’ enhanced role lie in the (global) external environment, notably in the industrial competitive structure and technological change.