Analysis Of The Impact Of Innovation Investment On Corporate Performance Of Pharmaceutical Companies

In China,innovation has become the eternal theme of development in this era,and the 18 th and19th National Congresses of the Party put forward the important proposition of building an innovative country.China has entered a new age of innovation strategy development under the policy of "Manufactured in China 2025," "driven by technical innovation and quality first." Nevertheless,since the development of most pharmaceutical enterprises in China,the enthusiasm for independent research and development has yet to improve,and the advancement orientation of pharmaceutical production industry is primarily oriented toward low price and low profit to compete with generic medicines.Since the thorough strengthening of medical reform in 2016,a number of measures,such as consistency evaluation,have been implemented,priority review and centralized procurement have been introduced,disrupting the status quo of homogeneous competition in China’s pharmaceutical sector,encouraging pharmaceutical companies to accelerate medicine quality improvement and development,research and development,and so on,and strengthening competition in the marketplace in the pharmaceutical companies.Although domestic pharmaceutical companies have made outstanding achievements in technological innovation and new drug development at this stage,they are still far from the level of developed countries.Pharmaceutical companies want to stand firm in the highly competitive market,it is fundamental to expand investment in R&D and strengthen technical innovation.As a result,it is critical for the growth of pharmaceutical firms,the industry,and the national economy to investigate how innovation investment in pharmaceutical companies influences corporate performance.Under this background,firstly,summarizes domestic research papers on innovation investment and company performance,and preliminarily analyzes the impact mechanism and related theory of R&D investment on company performance.Then,to understand the status of China’s pharmaceutical industry,including the overall status of R&D investment and performance,to preliminarily determine that R&D investment has a promoting effect on the growth of the company’s performance level,and lay the foundation for the next case study.After that,Hengrui Medicine is selected as the main research object,and quantitative analysis is carried out according to the R&D investment status of specific cases and the company’s performance level to study the correlation between the two.Select Hengrui Medicine from 2016 to 2020 as the research period,and use the combination of qualitative and quantitative methods to analyze the current situation of R&D investment from case companies’ R&D investment funds,R&D intensity and R&D personnel indicators.Based on the commonly used financial index analysis method In addition,considering the value of the enterprise,using the EVA evaluation method,and then combining the application of non-financial indicators such as the number of patent applications and the situation of new products,the financial performance and innovation performance of the studied enterprises are analyzed.Following a thorough examination of the influence of Hengrui Pharmaceutical’s R&D investment on the company’s performance,the following findings are reached: Although the impact of R&D expenditure on various financial indicators of companies varies,in general,R&D investment has a positive promoting influence on the formation of overall financial performance of firms,albeit with a certain amount of lag;R&D investment has a significant promoting influence on the improvement of enterprise value(or economic value added),that is,the two have a positive relationship.R&D investment has a substantial influence on company creation and output,assisting them to constantly break through innovation,release new items,and stimulate the construction of a positive innovation and output development trend.The following recommendations are made in order to further encourage the pharmaceutical industry’s creative and sustainable development: first,increase R&D investment to bring into play the potential of enterprises’ independent innovation;second,recruit talents to strengthen training and improve the overall quality of R&D personnel;third,reasonably arrange R&D investment activities and improve the value assessment system of scientific and technological innovation;fourth,the government should improve relevant support policies to encourage innovation and optimize the financing environment.