The objective of this text is to study the relationship between the governance structure and the input intensity of R & D investment of pharmaceutical enterprises, and to check the lag effect of R & D input on the performance.
The data of the balanced panel of 133 medical-listed enterprises from 2009 to 2016 were taking as samples, the regression analysis was performed by using the STATA13.0 software.
In the aspect of the ownership structure, the state-owned control has a negative effect on the R & D investment intensity, and the equity concentration degree and the equity balance degree are positive. In terms of the governance of the board of directors, the proportion of the two-level and independent directors is positively affecting the strength of R & D and the scale of the board of directors has a negative effect.
In that case of executive motivation, the share power incentive and salary incentive do not play the desired positive role. The lag effect of R & D investment on enterprise performance has verified. With the passage of time, the relationship between R & D investment and enterprise performance has gradually changed from significant negative to significant positive.
Based on the research results, some suggestions are put forward to provide empirical evidence for optimizing the internal governance structure of pharmaceutical enterprises and improving the efficiency of R & D.
Table of Contents
1. Foreword
2. Literature review and hypothetical development
2.1 Corporate governance structure and R & D investment intensity
2.1.1 Nature of stock rights
2.1.2 Equity concentration
2.1.3 Equity balance degree
2.1.4 Board size
2.1.5 Proportion of independent directors
2.1.6 two-job setup
2.1.7 Executive incentive
2.2 The intensity of R & D investment and enterprise performance
3. Test models, research samples and data
3.1 Sample selection and data sources
3.2 Variable definition and Model Construction
3.3 Descriptive statistics of variables
3.4 Correlation analysis of variables
4. Empirical results
4.1 Corporate governance structure and R & D investment intensity
4.2 The intensity of R & D investment and enterprise performance
5. Robustness test
6. Conclusion and suggestion
7. References
Research Objectives and Key Focus Areas
This study aims to examine the relationship between corporate governance structures and R&D investment intensity in pharmaceutical enterprises, while specifically evaluating the lag effect of such R&D investments on enterprise performance. The research utilizes empirical analysis to provide evidence for optimizing internal governance to improve innovation efficiency.
- The impact of ownership structure and state-owned versus non-state-owned holdings on R&D intensity.
- The role of board governance, including board size and the presence of independent directors, in shaping innovation strategies.
- The effectiveness of executive incentive mechanisms, such as equity and compensation, in motivating technological innovation.
- The lag effect of R&D expenditures on short-term versus long-term enterprise performance and financial outcomes.
Excerpt from the Book
2.1.1 Nature of stock rights
The state-owned enterprises are controlled by the state, their business objectives are diversified and restricted by many non-economic objectives, the motivation of technological innovation is greatly weakened, the subject of property rights is false, the subject of interest is vague, and it is difficult to focus on the long-term development of the enterprise. Because of the multi-layer principal-agent relationship, it is difficult to form an effective supervision mechanism, and it is easy to form the insider control, thus avoiding the risk. Reduce investment in innovation. Kornai et al., think that budget soft constraints will restrain the enthusiasm of managers of state-owned enterprises to carry out efficient operation and management of enterprises [11]. Zhang Qixiu pointed out that the state's informal intervention in state-owned enterprises will have a negative impact on the business decision-making and strategic implementation of the enterprises. It will also damage R & D investment conversion efficiency [12]. Many scholars have shown that state-owned holding companies have little investment in innovation and lack of efficiency compared to private property holding companies [13]. Based on this, this paper proposes the following assumptions:
Summary of Chapters
1. Foreword: This chapter contextualizes the importance of innovation in the pharmaceutical industry under national strategic frameworks and identifies the gap in internal governance optimization for technological R&D.
2. Literature review and hypothetical development: This section reviews existing studies on corporate governance and innovation, establishing hypotheses regarding equity structures, board mechanisms, and executive incentives.
3. Test models, research samples and data: This chapter outlines the methodology, including sample selection of 133 pharmaceutical enterprises, variable definitions, and the construction of regression models.
4. Empirical results: This section presents the statistical regression findings on the links between governance variables, R&D intensity, and the long-term performance impact of these investments.
5. Robustness test: This chapter verifies the initial findings by using ROE as an alternative performance measure to ensure the consistency of the results.
6. Conclusion and suggestion: This chapter summarizes the empirical findings and offers practical policy and management recommendations for improving R&D efficiency in pharmaceutical firms.
7. References: This section lists all scholarly sources and empirical data foundations used throughout the research paper.
Keywords
Pharmaceutical enterprises, Corporate governance, Investment in R & D, Enterprise performance, Hysteresis effect, Ownership structure, Board size, Independent directors, Executive incentive, Empirical analysis, Equity concentration, Equity balance, Innovation efficiency, Technological development, Strategic management.
Frequently Asked Questions
What is the fundamental purpose of this research?
The research aims to determine how different internal corporate governance structures influence the intensity of R&D investment in Chinese pharmaceutical companies and how these investments subsequently impact financial performance over time.
What are the central thematic fields covered in this study?
The study covers corporate governance (ownership, board structure, executive incentives), R&D investment behavior, and the relationship between innovation spending and corporate financial performance.
What is the primary research question?
The primary goal is to identify which corporate governance variables foster higher R&D investment and to prove the "hysteresis effect"—that R&D expenditure has a negative effect on current performance but a positive, delayed effect on long-term performance.
Which scientific methodology is applied?
The author uses a balanced panel data approach, analyzing 1,064 observations from 133 listed pharmaceutical enterprises between 2009 and 2016, utilizing STATA 13.0 for multivariate linear regression analysis.
What is addressed in the empirical main body?
The main body focuses on regression results linking corporate governance features (such as state ownership or board size) to R&D intensity, followed by testing the lag effect of these investments on ROA and ROE metrics.
Which keywords characterize this paper?
Key terms include pharmaceutical enterprises, corporate governance, R&D investment intensity, enterprise performance, and hysteresis effect.
How does the ownership structure affect innovation?
The study finds that state-owned holdings generally have a negative impact on R&D investment intensity compared to non-state-owned enterprises, suggesting a need for ownership reform.
What is the impact of board size on innovation?
The results indicate that larger board sizes can lead to inefficient management and poor communication, which negatively impacts the intensity of R&D investment.
Do executive incentives effectively boost R&D?
Surprisingly, the empirical results suggest that current equity and compensation incentives in the studied pharmaceutical companies do not significantly promote the desired levels of R&D strategy and investment.
Why is the "hysteresis effect" important for this industry?
The hysteresis effect highlights that pharmaceutical companies face a trade-off: R&D spending hurts current profits, making long-term strategic patience necessary, as the positive returns on innovation only manifest after several years.
- Arbeit zitieren
- Xue Mi (Autor:in), 2019, The Relationship among Governance Structure, R & D Investment and Performance of Pharmaceutical Enterprises, München, GRIN Verlag, https://www.grin.com/document/470279
