Details
| Original language | English |
|---|---|
| Pages (from-to) | 803-816 |
| Number of pages | 14 |
| Journal | The European journal of health economics |
| Volume | 24 |
| Issue number | 5 |
| Early online date | 26 Aug 2022 |
| Publication status | Published - Jul 2023 |
Abstract
This paper examines dividend policy issues in the European pharmaceutical industry. This sector is of particular interest because of the high research and development expenditures and the associated risks characterizing the business models of many firms in this industry. In fact, from the perspective of corporate finance theory, this is a particular challenge for the managers of these corporations that may also have implications for the dividend policy implemented by the firms forming this sector. Moreover, the level of internal financing and litigation risks also seem to be high in the pharmaceutical industry. These facts could also affect the payout policy of the firms. Employing techniques of time series analysis, there is no evidence for dividend signaling and clear evidence for dividend smoothing in the European pharmaceutical industry. Given that dividend increases under certain assumptions can negatively affect the firms' ability to finance new investments in general and research and development projects in particular, these results of our empirical investigations could be described as highly plausible.
Keywords
- Dividend policy, Granger causality, Health care firms, Litigation risk, Pharmaceutical industry, Research and development expenditures
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Economics, Econometrics and Finance (miscellaneous)
- Medicine(all)
- Health Policy
Sustainable Development Goals
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In: The European journal of health economics, Vol. 24, No. 5, 07.2023, p. 803-816.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Dividend policy issues in the European pharmaceutical industry
T2 - new empirical evidence
AU - Basse, Tobias
AU - Schwarzbach, Christoph
AU - Graf von der Schulenburg, J.-Matthias
N1 - Open Access funding enabled and organized by Projekt DEAL.
PY - 2023/7
Y1 - 2023/7
N2 - This paper examines dividend policy issues in the European pharmaceutical industry. This sector is of particular interest because of the high research and development expenditures and the associated risks characterizing the business models of many firms in this industry. In fact, from the perspective of corporate finance theory, this is a particular challenge for the managers of these corporations that may also have implications for the dividend policy implemented by the firms forming this sector. Moreover, the level of internal financing and litigation risks also seem to be high in the pharmaceutical industry. These facts could also affect the payout policy of the firms. Employing techniques of time series analysis, there is no evidence for dividend signaling and clear evidence for dividend smoothing in the European pharmaceutical industry. Given that dividend increases under certain assumptions can negatively affect the firms' ability to finance new investments in general and research and development projects in particular, these results of our empirical investigations could be described as highly plausible.
AB - This paper examines dividend policy issues in the European pharmaceutical industry. This sector is of particular interest because of the high research and development expenditures and the associated risks characterizing the business models of many firms in this industry. In fact, from the perspective of corporate finance theory, this is a particular challenge for the managers of these corporations that may also have implications for the dividend policy implemented by the firms forming this sector. Moreover, the level of internal financing and litigation risks also seem to be high in the pharmaceutical industry. These facts could also affect the payout policy of the firms. Employing techniques of time series analysis, there is no evidence for dividend signaling and clear evidence for dividend smoothing in the European pharmaceutical industry. Given that dividend increases under certain assumptions can negatively affect the firms' ability to finance new investments in general and research and development projects in particular, these results of our empirical investigations could be described as highly plausible.
KW - Dividend policy
KW - Granger causality
KW - Health care firms
KW - Litigation risk
KW - Pharmaceutical industry
KW - Research and development expenditures
UR - http://www.scopus.com/inward/record.url?scp=85137054539&partnerID=8YFLogxK
U2 - 10.1007/s10198-022-01510-5
DO - 10.1007/s10198-022-01510-5
M3 - Article
C2 - 36018442
AN - SCOPUS:85137054539
VL - 24
SP - 803
EP - 816
JO - The European journal of health economics
JF - The European journal of health economics
SN - 1618-7598
IS - 5
ER -