1998 Fiscal Year Final Research Report Summary
Economic Analysis of R&D Financing : A Case of Pharmaceutical Industry
| Project/Area Number |
09630050
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
経済政策(含経済事情)
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| Research Institution | KEIO UNIVERSITY |
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Principal Investigator |
ANEGAWA Tomofumi Keio University, Graduate School of Business Administration, Associate Professor., 大学院・経営管理研究科, 助教授 (80159417)
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| Project Period (FY) |
1997 – 1998
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| Keywords | R&D / profit / accounting return / economic return / value / price regulation / social overhead capital |
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| Research Abstract |
Summary
This study investigates financing decision of R&D of pharmaceutical firms. R&D investment is determined by the profitability of the R&D project and cash generated by a firm. To value R&D project, one must measure the role of cash flow profile of a pharmaceutical firms. I first examined the measurement of profitability of R&D investment by distinguishing accounting return from economic return. Second, I examined the effects of price regulation on demand, profitability of R&D project. Although Japanese price regulation is intended to restrain the expenditure of pharmaceuticals, Japanese pharmaceutical firms expanded their sales by substituting new products for old ones. Third, I investigate the economic roles of social overhead capital in R&D financing.
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