A STUDY OF THE IMPACT OF SALES INTENSITY AND R&D INVESTMENT ON ENTERPRISE PERFORMANCE IN THE PHARMACEUTICAL INDUSTRY

Jiao Dai; Busaya Chaysuriya

Authors

Jiao Dai Faculty of Management, Shinawatra University
Busaya Chaysuriya SHINAWATRA UNIVERSITY".

Keywords:

Sales Intensity, R&D Investment, Enterprise Performance

Abstract

Pharmaceutical industry is an industry that all countries in the world focus on, and the development and progress of pharmaceutical science and technology represent a country's scientific research strength, which can promote economic development and social progress. Research and development investment and sales intensity are two crucial aspects of pharmaceutical enterprises, in order to explore the impact of pharmaceutical enterprises' research and development investment and sales costs on the current period of corporate performance.

The objectives of this study are to examine the impact of &D investment intensity and sales intensity on profitability and development capability of listed pharmaceutical companies, and next to examine the differences in sales intensity and R&D investment intensity on the performance of listed pharmaceutical companies across industry types .

This study takes the public financial data of listed enterprises in China's pharmaceutical industry as the research object, and selects the top 50 enterprises in the industry rankings among the A-share listed chemical pharmaceutical enterprises, the top 69 enterprises in the return on net assets rankings in 2022 among the traditional Chinese medicine pharmaceutical enterprises, and the representative 49 enterprises among the biopharmaceutical pharmaceutical enterprises, for a total of 168 representative pharmaceutical enterprises to establish a regression model from the data of 2012-2022. In summary, listed companies in the pharmaceutical industry should maintain high sales intensity and R&D investment intensity, but the implementation needs to take into account the differences in the type of industry, which will help companies better respond to market changes and improve profitability and development.

References

Henry Grabowski and John Vernon. (1990,July).A New Look at the Returns and Risks to Pharmaceutical R&D. Management Science, Vol. 36, No. 7, pp. 804-821

Ping-Hung Hsieh, C.S. Mishra & D.H.Gobeli .(2003,May).The return on R&D versus capital expenditures in pharmaceutical and chemical industries. IEEE Transactions on Engineering Management, Volume:50, Issue: 2

Kotler, P, & Kevin, L. K. (2006).Marketing management.New Jersey: Pears on Education.

Amit, et al.(2004). Advertising Spending And Market Capitalization. America: University of California, Los Angeles, Anderson School of Management.

Chen J,Waters G.(2017).Firm efficiency,advertising and profitability:Theory and evidence.The Quarterly Review of Economics and Finance,63:240-248.

Joshi A,Hanssens D M.(2018).The direct and indirect effects of advertising spending on firmvalue.Long-Term Impact of Marketing:Compendium:521-556.

Zhou, Luo Lin. (2018).Marketing input, financial leverage and firm performance. Finance and accounting newsletter, 766(02):27-29.

MIAO Jixiang, MENG Qingjun, WU JianpingResearch on the interaction mechanism between innovation speed and enterprise value in the complex environment of Chinese medicine enterprises. Journal of Economic Research,25:14-18.

Pan Haiying, Fan Xiaoyan, Zong Zhaocang.(2016). Advertising investment and corporate performance - an empirical analysis based on listed FMCG companies. Investment Research, 35(01):31-36.2

ZHONG Yangmei,GAO Mengbo. (2018).Empirical analysis of the impact of R&D expenditure on operating profit in pharmaceutical industry.Journal of Jiangsu Second Normal College,34(04):59-64[15]

YAN Bin.(2020).The impact of marketing expenditure intensity on corporate performance an empirical study based on listed companies in the pharmaceutical industry. Shanghai University of Finance and Economics, Shanghai.

Bosworth D,Rogers M.(2001).Market value, R&D and intellectual property: an empirical analysis of large Australian firms J . Economic Record,77(239): 323-337.

Wang Xiaoting. (2015).An empirical study on the correlation between R&D inputs and corporate performance in high-tech industries I Empirical evidence from small and medium-sized listed companies. Finance and Accounting Communication, 692(36):32-34+41.

Zhang Yuan,Li Zexi,Hu Bing.(2019). R&D Investment, Advertising Expenditure and Financial Performance--A Case Study of Biomedical Industry. Financial Supervision,14:90-97.30

Yang Kanglin,Xu Shiying. (2021).A study on the relationship between government subsidies, R&D expenditures and corporate performance - a case of pharmaceutical industry enterprises. Science and Technology,05:16-20.

Tian Yuexin,Feng Qinghua. (2014).An empirical study on the impact of listed companies' R&D expenditures on enterprise value I from biomedical industry data. Accounting Newsletter,15:49-51.

Lin B.Lee Y Hung S.(2006).R&D Intensity and Commercialization Orientation Effects on Financial Performance.Journal of Business Research,59(6): 679-685

Wang, Lianglong. (2013)Do Selling and Administrative Expenses Have an Impact on Firms' Future Performance? An empirical data from Shanghai and Shenzhen A-shares from 2007 to 2010. Finance and Accounting Communication, 27: 96-98.

Sun Feng . Wang Youzhi. YU Jingliang. (2014).R&D input-output efficiency and countermeasures in China's pharmaceutical manufacturing industry an empirical study based on pharmaceutical manufacturing Panal Date. Science and Technology Progress and Countermeasures, 11 (vol31,22) :46-50