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The attractiveness of the Indian pharmaceutical industry as a destination for R&D sourcing by multinational corporations (MNCs) has evolved over the past decades. This evolution has coincided with changes in MNC strategies regarding sourcing location and governance modes. We propose a co-evolutionary theory perspective embracing both firm-internal and firm-environmental factors for location attractiveness, along with institutional and industry changes. The framework integrates constructs from past research in economic geography, international business, and R&D internationalization. The Indian case illustrates how host-country institutional evolution, notably regarding intellectual property rights and education, plays a significant role for international sourcing of pharmaceutical R&D.
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