|
KMID : 1235020230170020001
|
|
Health Service Management Review
2023 Volume.17 No. 2 p.1 ~ p.12
|
|
|
The Effects of Pharmaceutical Companies' R&D Investment on Financial Performance: Focusing on R&D Investment Period
|
|
An Soo-Kyung
Cha Jae-Bin
|
|
|
Abstract
|
|
|
This study aims to analyze the impact of R&D investment on the financial performance of pharmaceutical companies. Specifically, it examines whether the criteria of R&D investment spanning 4 years or more is appropriate and investigates the influence of current-period R&D investment on financial performance. The sample was extracted from the manufacturing center of medical substances and pharmaceuticals listed on the Korea Exchange (KRX) KOSPI (Korea Composite Stock Price Index) market. A total sample of 1,587 domestic pharmaceutical companies was analyzed for R&D investment in the previous year, centering on the current year's ordinary income for each of the eight years.
As expected in hypothesis (H1), the results showed that R&D investment in the short term could not affect the financial performance of the year. Linear regression analysis was conducted to identify the variables that affect ordinary profit. Short-term R&D investment seems to have a negative (-) negative impact on a company's financial performance, but long-term continuous reinvestment has a positive (+) impact on financial performance. As hypothesized (H2), it is expected that pharmaceutical companies need to invest in R&D for an average period of more than 4 years. This investment is crucial as it allows the completion of research and development products, leading to sales or the acquisition of legal rights as intangible assets. Such outcomes can have a significant impact on the future financial performance of the company.
It states that the study suggests that companies anticipate the commercialization of new drug developments and the generation of profits for the company once the R&D investment period concludes. The sentence is clear and concise, conveying the expectation of financial gains from the completion of the R&D phase. A limitation of this study is that it may be deemed insufficient from the perspective of accounting information users to solely focus on research and development expenses within the pharmaceutical industry.
|
|
|
KEYWORD
|
|
|
R&D investment, Pharmaceutical Company, Financial Performance
|
|
|
FullTexts / Linksout information
|
|
|
|
|
|
Listed journal information
|
|
|
|