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This paper analyzes patent data of medicines and vaccines for diseases spreading in low‐income countries. The data were retrieved from a database of the Japan Patent Office. Who invents medicines for the poor of the world? This is the main question that the paper addresses. Results indicate that not only public institutions but also private firms have played an important role in developing innovations for fighting both global diseases such as HIV/AIDS and tuberculosis, and so‐called neglected diseases including malaria, which seem to spread almost exclusively in low‐income countries. Moreover, the basic mechanism of innovation is similar between the development of medicines for HIV/AIDS and those for neglected diseases. Finally, among firms, infectious disease fighting innovations are quite diverse. R&D stock and economies of scope are used to explain frequent patent applications by a high‐performing pharmaceutical firm.

During the period 2000-2009, offshore sourcing by Japanese firms to East Asian countries rapidly increased. Our survey on Japanese offshoring shows that 20 per cent of the Japanese companies are performing offshore sourcing and more than 50 per cent of the companies with 300 or more employees are conducting offshore sourcing in China and other East Asian countries mainly for the tasks of manufacturing parts and intermediate goods or assembling final goods. It is predictable that such an increase of offshoring stimulates the exit of firms with low efficiency from the market and raises the productivity of existing firms through a change of resource allocation within or between firms. Our empirical estimation based on the Japanese firm-level data shows that the productivity differs by 3 per cent between offshoring and non-offshoring firms and offshoring raises the productivity by 5 per cent ceteris paribus.