The Relationship between R&amp;D investment and Ownership Structure in KOSDAQ Pharmaceutical Firms

Munjae, Lee; Choi, Minsu

doi:10.5392/jkca.2015.15.06.445

Cited by 2 publications

(2 citation statements)

References 30 publications

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“…Foreign investors have significantly changed the business practices of companies based on their superior business-monitoring techniques. The findings of this study, which indicate that the higher shareholding ratio of foreigners leads to greater R&D investment, indicate that foreigners directly or indirectly impose pressure on a manager to make investments in R&D that lead to long-term benefits [24] .…”

Section: Discussionmentioning

confidence: 71%

Impact of Corporate Governance on Research and Development Investment in the Pharmaceutical Industry in South Korea

Lee

2015

Osong Public Health and Research Perspectives

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ObjectivesThe purpose of this study is to analyze the influence of the corporate governance of pharmaceutical companies on research and development (R&D) investment.MethodsThe period of the empirical analysis is from 2000 to 2012. Financial statements and comments in general, and internal transactions were extracted from TS-2000 of the Korea Listed Company Association. Sample firms were those that belong to the medical substance and drug manufacturing industries. Ultimately, 786 firm-year data of 81 firms were included in the sample (unbalanced panel data).ResultsThe shareholding ratio of major shareholders and foreigners turned out to have a statistically significant influence on R&D investment (p < 0.05). No statistical significance was found in the shareholding ratio of institutional investors and the ratio of outside directors.ConclusionThe higher the shareholding ratio of the major shareholders, the greater the R&D investment. There will be a need to establish (or switch to) a holding company structure. Holding companies can directly manage R&D in fields with high initial risks, and they can diversify these risks. The larger the number of foreign investors, the greater the R&D investment, indicating that foreigners directly or indirectly impose pressure on a manager to make R&D investments that bring long-term benefits.

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Section: Discussionmentioning

confidence: 71%

Impact of Corporate Governance on Research and Development Investment in the Pharmaceutical Industry in South Korea

Lee

2015

Osong Public Health and Research Perspectives

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“…Therefore, R&D that requires liquidity will be restricted when internal finances are reduced, even though it may be a relatively small amount compared to the fixed or inventory investment requirements of the decrement of the total investment. Moreover, as the company tends not to disclose the elements or progress of its R&D to the suppliers of external funds, receiving external financing will be more difficult and the cost of such external funds may be higher than internal funds [19].…”

Section: Research Modelmentioning

confidence: 99%

Effect of Cash flow on the R&D investment of Pharmaceutical Companies - focused on KOSDAQ market

Lee¹,

Choi²

2015

The Journal of the Korea Contents Association

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The Relationship between R&D investment and Ownership Structure in KOSDAQ Pharmaceutical Firms

Abstract: The purpose of this study is to analyze the influence of the financial structure of

Cited by 2 publications

References 30 publications

Impact of Corporate Governance on Research and Development Investment in the Pharmaceutical Industry in South Korea

Impact of Corporate Governance on Research and Development Investment in the Pharmaceutical Industry in South Korea

Effect of Cash flow on the R&D investment of Pharmaceutical Companies - focused on KOSDAQ market

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