  There are significant differences in innovation performance between
countries. Additionally, the pharmaceutical sector is stronger in some
countries than in others. This suggests that the development of the
pharmaceutical industry can influence a country's innovation performance. Using
the Global Innovation Index and selected performance measures of the
pharmaceutical sector, this study examines how the pharmaceutical sector
influences the innovation performance of countries from the European context.
The dataset of 27 European countries was analysed using simple, and multiple
linear regressions and Pearson correlation. Our findings show that only three
indicators of the pharmaceutical industry, more precisely pharmaceutical
Research and Development, pharmaceutical exports, and pharmaceutical employment
explain the innovation performance of a country largely. Pharmaceutical
Research and Development and exports have a significant positive impact on a
country's innovation performance, whereas employment in the pharmaceutical
industry has a slightly negative impact. Additionally, global innovation
performance has been found to positively influence life expectancy. We further
outline the implications and possible policy directions based on these
findings.
