Abstract

http://ssrn.com/abstract=1824267
 
 

References (4)



 
 

Citations (2)



 


 



Impact of Profitability, R&D Intensity, and Cash Flow on R&D Expenditure in Pharmaceutical Companies


Destrina Grace Simanjuntak


Dexa Laboratories of Biomolecular Sciences, Dexa Medica Group

Raymond R. Tjandrawinata


Department of Business Development and Dexa Laboratories of Biomolecular Sciences, PT Dexa Medica

April 29, 2011


Abstract:     
This paper empirically examines the influence of the determinants of R&D expenditure, such as firm’s lagged profitability, R&D intensity, and cash flow on R&D expenditure of the pharmaceutical companies. All of them have an important roles in determining the steps of the corporate strategy to investing in R&D activities. The data used in this study was gathered from six large pharmaceutical companies in the U.S., in the period of 2003 to 2010. The result shows that firm’s lag profitability, R&D intensity, and cash flow have the positive influence and affect significantly the firms amount R&D expenditure in the pharmaceutical companies. Thus, enhancement in the firm’s one-year lagged profitability, R&D intensity, and cash flow can increase firm’s amount of R&D expenditure.

Number of Pages in PDF File: 13

Keywords: Research and Development Expenditure, Profitability, R&D Intensity, Cash Flow

JEL Classification: I11, L21, L65, O30

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Date posted: May 5, 2011  

Suggested Citation

Simanjuntak, Destrina Grace and Tjandrawinata, Raymond R., Impact of Profitability, R&D Intensity, and Cash Flow on R&D Expenditure in Pharmaceutical Companies (April 29, 2011). Available at SSRN: http://ssrn.com/abstract=1824267 or http://dx.doi.org/10.2139/ssrn.1824267

Contact Information

Destrina Grace Simanjuntak
Dexa Laboratories of Biomolecular Sciences, Dexa Medica Group ( email )
Boulevard Bintaro St. Sector 7, Block B7/B1 No.05
Tangerang, ID Banten 15224
Indonesia
(62)(21)7451777 (Phone)
(62)(21)7452573 (Fax)
Raymond R. Tjandrawinata (Contact Author)
Department of Business Development and Dexa Laboratories of Biomolecular Sciences, PT Dexa Medica ( email )
Tangerang
Indonesia
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