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Intellectual Capital and Financial Performance of Biotech Companies in the Pharmaceutical Industry


  • Ion Anghel

    (The Bucharest University of Economic Studies, Bucharest, Romania)

  • Marian Siminica

    (University of Craiova, Craiova, Romania)

  • Mirela Cristea

    (University of Craiova, Craiova, Romania)

  • Mirela Sichigea

    (University of Craiova, Craiova, Romania)

  • Gra?iela Georgiana Noja

    (West University of Timisoara, Timisoara, Romania)


The paper’s aim is to analyse the interdependency between the intellectual capital and the financial performance of biotechnological (biotech) companies in the pharmaceutical industry. The analysis was performed for 24 biotech companies in this branch considered during 2002-2014, based on several indicators available on the Thomson Reuters database. The financial performance was measured through the return on assets (ROA), return on equity (ROE) and the debt-to-equity ratio (DE). In order to capture the intellectual capital, the focus was on a designing a new indicator, proposed by the authors, respectively the efficiency of research and development expenditures (ECD), along with another proxy, previously attested by the literature and reflected through the market to-book ratio (MTB). The research methodology resides on applying the correlation method, robust regression, and structural equations modelling (SEM). The results reveal a significant negative relationship between ROA, ROE and MTB, which contradicts the literature and suggests that, for this particular type of companies, MTB isn’t relevant to express the intellectual capital. MTB was positively correlated with DE. When we used the ECD, the results attested a strongly positive and significant relation with ROA and ROE, and a negative one with DE. Therefore, the applied tests confirm ECD as the most suitable indicator to appreciate the intellectual capital for the biotech companies in the pharmaceutical industry.

Suggested Citation

  • Ion Anghel & Marian Siminica & Mirela Cristea & Mirela Sichigea & Gra?iela Georgiana Noja, 2018. "Intellectual Capital and Financial Performance of Biotech Companies in the Pharmaceutical Industry," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 20(49), pages 631-631, August.
  • Handle: RePEc:aes:amfeco:v:20:y:2018:i:49:p:631

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    References listed on IDEAS

    1. Ion Anghel, 2008. "Intellectual Capital and Intangible Assets Analysis and Valuation," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 3(3(520)), pages 75-84, March.
    2. Bojan Krstić & Ljiljana Bonić, 2016. "EIC: A New Tool for Intellectual Capital Performance Measurement," Prague Economic Papers, Prague University of Economics and Business, vol. 2016(6), pages 723-741.
    3. Shahid Amin & Shoaib Aslam, 2017. "Intellectual Capital, Innovation and Firm Performance of Pharmaceuticals: A Study of the London Stock Exchange," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 16(02), pages 1-20, June.
    4. Zucker, Lynne G. & Darby, Michael R., 1997. "Present at the biotechnological revolution: transformation of technological identity for a large incumbent pharmaceutical firm," Research Policy, Elsevier, vol. 26(4-5), pages 429-446, December.
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    Cited by:

    1. Veronika Fenyves & Balazs Nyul & Krisztina Dajnoki & Zoltan Bacs & Gergo Tomori, 2019. "Profitability of Pharmaceutical Companies in the Visegrád Countries," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 15(4), pages 99-111.

    More about this item


    intellectual capital; bioeconomy; biotech companies; company’s value; financial performance; correlation analysis; structural equation models (SEM).;

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics


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