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This paper presents a DEA (Data Envelopment Analysis)/ Malmquist index methodology for measuring the R&D efficiency change of the Japanese pharmaceutical industry. Letting each of ten firms each year be a separate DMU (Decision-Making Unit) and employing one input and three outputs in the DEA, and using the cumulative frontier shift component on average proposed in the Malmquist index analysis, we quite obviously show the industry-wide R&D efficiency change for the period 1982-2001. The results empirically reveal that the R&D efficiency of the Japanese industry, which has seemed elusive, has surely gotten worse almost monotonically for these twenty years at least as to the pharmaceutical one.

This is a revised version of the paper: Hashimoto, A. and Haneda, S., Measuring the change in R&D efficiency of the Japanese pharmaceutical industry. Dept. Social Systs Mgmt Discussion Pap. Ser. 1128, Univ. Tsukuba, 2005., This paper presents a DEA (Data Envelopment Analysis)/ Malmquist index methodology for measuring the R&D efficiency change of the Japanese pharmaceutical industry. Letting each of ten firms in each year be a separate DMU (Decision-Making Unit) and employing one input and three outputs in the DEA, and using the cumulative frontier shift component on average proposed in the Malmquist index analysis, we quite obviously show the industry-wide R&D efficiency change throughout the decade 1991-2000. The results empirically reveal that the R&D efficiency of the Japanese industry has surely gotten worse almost monotonically for the decade at least as to the pharmaceutical one.