Relationship between R&D Investment and Enterprise Performance of Pharmaceutical Enterprises in China: Research on 45 Domestic Listed Pharmaceutical Companies Based on Panel Data

Abstract

Objective To study the causal relationship between R&D investment and enterprise performance of domestic pharmaceutical enterprises. Methods Panel data model was adopted for empirical analysis. Results and Conclusion Increasing the R&D investment intensity of pharmaceutical enterprises in the Yangtze River Delta and Zhejiang by 1% will increase their profit margins by 0.79% and 0.46%. On the contrary, if the profit margin increases by 1%, the R&D investment intensity will increase by 0.25% and 0.19%. If the profit margin of pharmaceutical enterprises in Beijing, Tianjin, Hebei, Chengdu, Chongqing and other regions increases by 1%, the R&D investment intensity will increase by 0.14%, 0.07% and 0.1%, respectively, which are lower than those in the Yangtze River Delta and Zhejiang. The relationship between R&D investment and enterprise performance of pharmaceutical enterprises in the Yangtze River Delta and Zhejiang Province is Granger causality, showing a two-way positive effect. Profits and R&D investment of pharmaceutical enterprises in Beijing, Tianjin, Hebei, Chengdu, Chongqing and other regions are also Granger causality. But in the Pearl River Delta, profits and R&D investment have not passed the stability test, it is impossible to determine the causality between them.

Keywords

R&D investment / enterprise performance / panel data model

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