Skip Navigation
Skip to contents

PHRP : Osong Public Health and Research Perspectives

OPEN ACCESS
SEARCH
Search

Search

Page Path
HOME > Search
1 "ownership structure"
Filter
Filter
Article category
Keywords
Publication year
Authors
Original Article
Impact of Corporate Governance on Research and Development Investment in the Pharmaceutical Industry in South Korea
Munjae Lee
Osong Public Health Res Perspect. 2015;6(4):249-255.   Published online August 31, 2015
DOI: https://doi.org/10.1016/j.phrp.2015.07.003
  • 1,361 View
  • 18 Download
  • 3 Citations
AbstractAbstract PDF
Objectives
The purpose of this study is to analyze the influence of the corporate governance of pharmaceutical companies on research and development (R&D) investment.
Methods
The 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).
Results
The 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.
Conclusion
The 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.

PHRP : Osong Public Health and Research Perspectives