Browse > Article
http://dx.doi.org/10.5762/KAIS.2019.20.11.487

The Influence on Enterprise Value of R&D Costs of KOSDAQ pharmaceutical companies  

Jo, Young-Ran (School of Pharmacy, Sungkyunkwan University)
Lee, Sang-Won (School of Pharmacy, Sungkyunkwan University)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.20, no.11, 2019 , pp. 487-493 More about this Journal
Abstract
This study examines the ratio of R&D expenses in intangible assets for pharmaceutical companies, and determines whether these expenses affect the firm value among companies listed on the KOSDAQ. The research subjects included annual R&D expenses of 39 pharmaceutical companies listed on the KOSDAQ between 2011 and 2017. The survey was achieved via "Panel Data Model" with "Tobin Q" as an independent variable, and the ratio of R&D expenses in intangible as a dependent variable. Results of the study conclude that the ratio of R&D expenses in intangible assets of KOSDAQ pharmaceutical companies negatively influence the Tobin Q (Enterprise Value). A large proportion of intangible assets indicates increased R & D investment, and the operating profit is likely to be low due to the high debt ratio, thereby negatively impacting the enterprise value. This study further investigates whether the existing researches are based on researches that identify the total value of R & D expenditure. Results determine a significant relationship between enterprise value and R & D expenditure.
Keywords
R&D Cost; Intangible Assets; TobinQ; Pharmaceutical; Enterprise Value;
Citations & Related Records
연도 인용수 순위
  • Reference
1 K. M. Lee, K. C. Lee, The Effects of R & D Investment in Korean Pharmaceutical Industry on Firm Performance, Research of Professional Managers, vol.10, No.2, pp.81-101, 2007
2 DiMasi JA, Hansen RW, H. G. Grabowski.The price of innovation: new estimates of drug development costs Jos, Research Technology Management, Vol.46, No.5, pp.64, 2003
3 S. J. Lee, Intangible assets Accounting change, DAILYPHARM, 2018, http://www.dailypharm.com/ (accessed Oct.4,2019)
4 S. Y. Park, S. P. Cho, Comparison of Research and Development Activities of Domestic Companies and Implications, Korea Institute of Science and Technology Evaluation and Planning, 2007.
5 S. H. Shin, D. H Lee, The relevance of IFRS adoption to accounting for R & D expenses. Journal of Business Administration, Vol.15, No 2, pp.1-23, 2007.
6 M. T. Kim, The Effects of Capitalization on R & D Expenditure on Profit Management in the Pharmaceutical Industry, Journal of Financial and Accounting Information, Vol.16, No.1, 2016.
7 K. S. Kim, W. T. Kim, S. S. Park, D. H. Jang and C. Y. Lee, Estimation of Tobin's Q for Korean Listed Firms). Analysis of the Korean economy, vol. 2, No.2, pp.147-75, 1996.
8 J. H. Ahn, The Effect of Research and Development Costs of External Audit IT Firms on Accounting Corporate Performance-Analysis Using Panel data, Pusan University, Economic Master's. thesis, 2017.
9 K. H. Yook, Review of R & D and economic effects of advertising expenditure. JOURNAL OF BUSINESS RESEARCH, Vol.18, pp219-51, 2003.   DOI
10 K. S. Bae, The Impact of the Development Cost of Intangible Assets of Life Company on Corporate Value, Chungbuk National University, 2015.
11 J. G. Lee, The Effects of Corporate Characteristics on the Relationship between R & D and Corporate Value. Financial Engineering Research. 9, pp.77-101, 2010.
12 J. H. Kim,. The impact of R & D spending on firm profit and firm value. InternationalAccounting Research, Vol.19, pp.139-55, 2007.
13 J. S. Choi, Y. M. Kwak J. H. Sohn, KOSDAQ Newly listed companies seeking profit adjustment and managerial private profit. Accounting Studies, Vol.35 No.3, pp.37-80, 2010.
14 E. S. Lee, Comparison of R & D Capitalization of Pharmaceutical Companies. Accounting Information Research, Vol.33, No.2, pp.141-59, 2015.
15 S. Y. Park, Managerial Opportunity for Earnings Announcement and Accuracy of Preliminary Earnings. The Korean Academic Association of Business Administration, Vol.31, No.9, pp.1665-86, 2018.   DOI
16 D. W. Kim, S. M, Jang and H, J Song, Determinants of R & D investment scale of pharmaceutical companies, Health Economy and Policy Research, Vol.6, No.2, 2010.