Macroeconomic factors, liquidity issues and research and development investments: empirical evidence from the EU pharmaceutical industry
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Published:2023
Issue:1
Volume:14
Page:261-283
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ISSN:2068-6633
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Container-title:Eastern Journal of European Studies
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language:
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Short-container-title:EJES
Author:
Curea Mihaela1,
Ungureanu Iuliana1,
Mironiuc Marilena1
Affiliation:
1. Alexandru Ioan Cuza University of Iasi, Romania
Abstract
In recent decades, the business landscape is influenced by corruption, a pervasive
phenomenon, faced by all countries, irrespective of their stage of development. The
pharmaceutical industry is recognized as a “fertile ground” for corrupt practices. The
paper aims to investigate the impact of corruption, economic freedom, and gross
domestic product (GDP) growth on research and development (R&D) investment using
a dataset of European Union (EU) pharmaceutical companies from 2011 to 2019. It also
investigates the moderating effect of liquidity issues on the relationship between
corruption and R&D investment. The study employs a quantitative approach using fixed
effects models. Results show that corruption has a negative influence on pharmaceutical
firms’ decision to undertake R&D activities, while economic freedom and GDP growth
have a positive and significant impact on R&D investment. The findings are especially
important given the deleterious effects of corruption and may be useful for both managers
and policy-makers.
Publisher
Editura Universitatii Alexandru Ioan Cuza din Iasi
Subject
Political Science and International Relations,General Economics, Econometrics and Finance,Sociology and Political Science,History