The Impact of Mergers and Acquisitions in Research-Based Pharmaceutical Companies on Productivity
Raymond R. Tjandrawinata
Department of Business Development and Dexa Laboratories of Biomolecular Sciences, PT Dexa Medica
Destrina Grace Simanjuntak
Dexa Laboratories of Biomolecular Sciences, Dexa Medica Group
January 9, 2012
This paper analyzes the impact of mergers and acquisitions (M&A) activities in research-based pharmaceutical companies, specifically the impact of R&D expenditure, sales revenue, and R&D intensity on firms’ productivity, on drug approval in pharmaceutical industries following M&A activities. The model was estimated using annual data, gathered from eight large research-based pharmaceutical companies in the world post-M&A, during the period 2003 until 2010. The regression analysis method uses a pooled regression method with generalized least square (GLS) analysis. The result further shows that following M&A activities, firms’ one-year lagged sales revenue (t-1) and R&D intensity to be positive in increasing significantly the firms’ amount of total approval of drugs in research-based pharmaceutical industries, while, surprisingly firms’ one-year lagged R&D expenditure (t-1) have a negative impact in increasing significantly the firms’ amount of total approval of drugs in research-based pharmaceutical industries.
Number of Pages in PDF File: 20
Keywords: mergers and acquisitions (M&A), R&D expenditure, sales revenue, R&D Intensity, total approval, new molecular entity
JEL Classification: A10, C33, G34, L21, M21working papers series
Date posted: January 9, 2012
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo4 in 0.360 seconds