The Impact of Research and Development and Marketing Costs on the Profitability of Pharmaceutical Companies of Tehran Stock Exchange Using Panel Data 2001-2013 Publisher



Bayazidi Y¹ ; Homaie Rad E² ; Mojahedian M¹ ; Toroski M¹ ; Nabizadeh A¹ ; Farahmand P¹ ; Felezi Nasiri B³
Source: International Journal of Pharmaceutical and Healthcare Marketing Published:2016

Abstract

Purpose: The main aim of this study is to investigate the effects of marketing and costs and research and development (R&D) investments on profitability of pharmaceutical companies of Iran. Design/methodology/approach: In this study, pharmaceutical companies that have been accepted in Tehran Stock Exchange until March 19, 2013 were investigated. Random-effect panel data estimator was used for this purpose. Findings: The findings indicate that variables such as company size, capital-to-total asset ratio and debt-to-asset ratio have an effect on profitability. But, company life, advertising cost and R&D investment are ineffective on profitability. Originality/value: Legal issues like not having patent law and pricing mechanism are reasons for the ineffective relationship between R&D and marketing costs and its effect on profitability of the Iran pharmaceutical industry. © 2016, © Emerald Group Publishing Limited.