Research On The Relationship Between R & D Expenditure And Enterprise Value In Pharmaceutical Industry

Since the 21 st century, the economic globalization rapidly developing as human civilization progressed, China’s enterprises have realized that the foundation and key point of enhance their core competitiveness lies in corporate R&D activities, especially for the industry of pharmaceutical development and manufacturing which rapid developing rapidly and with high-tech investments. Research and development of new drugs are the main force of technological innovation, it plays a vital role for the development of pharmaceutical industry. Therefore, to explore the relative relationship of pharmaceutical industry R&D spending and enterprise value is essential.In this paper, based on the theory of input-output theory and technological innovation, we take R&D expenditure data and related capital market data which disclosed in listed pharmaceutical companies’ annual reports as example and give an empirical analysis. Firstly, descriptively statistics the data of R&D expenditures samples, thus to analyze the Pearson correlation between corporate R&D spending,corporate financial value and market value. Establishing the linear regression model of R&D spending and business value based on the results of the correlation analysis. Finally we get the following conclusions according to the empirical results: there is no significant correlation between the expenditures of pharmaceutical industry R&D and the total assets net profit margin, the operating income margin and stock prices, but there exist a significant positive correlation with Tobin’s Q, Which reflected in the fourth year after R&D spend. At the same time, the cumulate of four year R&D spending has a positive role in promoting on enterprise value, that is R&D expenditures have a cumulative effect. Finally, this paper put forward some relevant proposals on listed pharmaceutical companies and the government.