Cluster versus Firm-specific Factors in the Development of Dynamic Capabilities in the Pharmaceutical Industry in Ireland: A Study of Responses to Changes in Environmental Protection Regulations

Hilliard R. and Jacobson D. Cluster versus firm specific-factors in the development of dynamic capabilities in the pharmaceutical industry in Ireland: a study of responses to changes in environmental protection regulations, Regional Studies. This paper uses the evolutionary economic theory of the firm to examine the response of pharmaceutical manufacturing firms to changes in environmental regulations. Quantitative indicators of firms' learning and problem-solving are developed using data reported to the Irish Environmental Protection Agency (EPA). These are used to look at differences in capability between firms that are part of a pharmaceutical agglomeration and firms that are stand-alone. Analysis shows that spatial proximity may be a factor in firms' ability to implement both cleaner technology and the mandated managerial processes, but that the strength of problem-solving routines is also associated with firm-specific capabilities.