IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2017-03-92.html
   My bibliography  Save this article

Financial Performance of Healthcare Firms: The Case of Korea

Author

Listed:
  • Jun Woo Park

    (Department of Business Administration, Cheongju University, Cheongju, Korea,)

  • Seyoung Guahk

    (Department of Business Administration, Cheongju University, Cheongju, Korea.)

Abstract

The purpose of this study is to analyze the financial performance and financial characteristics of healthcare companies. Healthcare firms are statistically significantly higher than non-healthcare companies in terms of several ratios such as research and development (R and D) cost ratio, selling general and administrative expenses ratio, Tobin's Q, return on equity, return on sales, total capital growth and sales growth. The cost of sales ratio is statistically lower than that of non-healthcare companies, which implies that healthcare companies spend much R and D costs for technological innovation, and as a result, they increase corporate value by lowering the cost of sales ratio and improving profitability. The profitability, growth, and leverage of healthcare companies were found to influence more on corporate value for the healthcare firms than those of non-healthcare companies. This result can be interpreted as reflecting the expectation that future cash flow will be more influenced by profitability, growth, and leverage of healthcare companies.

Suggested Citation

  • Jun Woo Park & Seyoung Guahk, 2017. "Financial Performance of Healthcare Firms: The Case of Korea," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 721-728.
    • Handle: RePEc:eco:journ1:2017-03-92
    as

    Download full text from publisher

    File URL: http://www.econjournals.com/index.php/ijefi/article/download/4398/pdf
    Download Restriction: no
    File URL: http://www.econjournals.com/index.php/ijefi/article/view/4398/pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zvi Griliches, 1998. "Productivity and R&D at the Firm Level," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 100-133, National Bureau of Economic Research, Inc.
    2. Zvi Griliches, 1984. "R&D, Patents, and Productivity," NBER Books, National Bureau of Economic Research, Inc, number gril84-1.
    3. Robyn McLaughlin & Assem Safieddine & Gopala K. Vasudevan, 1996. "The Operating Performance of Seasoned Equity Issuers: Free Cash Flow and Post-Issue Performance," Financial Management, Financial Management Association, vol. 25(4), Winter.
    4. Gil S. Bae & Jinho Jeong & Huey‐Lian Sun & Alex P. Tang, 2002. "Stock Returns and Operating Performance of Securities Issuers," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 25(3), pages 337-352, September.
    5. Noolee Kim & Kyoung-Min Kwon, 2015. "Certification Benefits in High-Tech Industry: Evidence from Supply Contracts in the Korean Market," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(5), pages 1001-1020, September.
    6. Branch, Ben, 1974. "Research and Development Activity and Profitability: A Distributed Lag Analysis," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 999-1011, Sept./Oct.
    7. Kondo, Masayuki, 1999. "R&D dynamics of creating patents in the Japanese industry," Research Policy, Elsevier, vol. 28(6), pages 587-600, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Iwasa, Tomoko & Odagiri, Hiroyuki, 2004. "Overseas R&D, knowledge sourcing, and patenting: an empirical study of Japanese R&D investment in the US," Research Policy, Elsevier, vol. 33(5), pages 807-828, July.
    2. Hagedoorn, John & Cloodt, Myriam, 2003. "Measuring innovative performance: is there an advantage in using multiple indicators?," Research Policy, Elsevier, vol. 32(8), pages 1365-1379, September.
    3. Tsang, Eric W.K. & Yip, Paul S.L. & Toh, Mun Heng, 2008. "The impact of R&D on value added for domestic and foreign firms in a newly industrialized economy," International Business Review, Elsevier, vol. 17(4), pages 423-441, August.
    4. Show‐Ling Jang & Guo‐Gang Huang, 2005. "Public R&D And Industrial Innovations At The Project Levels: An Exploration Of Taiwan'S Public Research Projects," Contemporary Economic Policy, Western Economic Association International, vol. 23(4), pages 636-646, October.
    5. Shah, Anwar & DEC, 1994. "The economics of research and development : how research and development capital affects production and markets and is affected by tax incentives," Policy Research Working Paper Series 1325, The World Bank.
    6. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    7. Dirk Czarnitzki & Hanna Hottenrott & Susanne Thorwarth, 2011. "Industrial research versus development investment: the implications of financial constraints," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(3), pages 527-544.
    8. Nils Grashof, 2020. "Sinking or swimming in the cluster labour pool? A firm-specific analysis of the effect of specialized labour," Jena Economics Research Papers 2020-006, Friedrich-Schiller-University Jena.
    9. Bronwyn Hall & Alessandro Maffioli, 2008. "Evaluating the impact of technology development funds in emerging economies: evidence from Latin America," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 172-198.
    10. Antonelli, Cristiano, 2017. "Digital knowledge generation and the appropriability trade-off," Telecommunications Policy, Elsevier, vol. 41(10), pages 991-1002.
    11. Hall, Bronwyn H. & Oriani, Raffaele, 2006. "Does the market value R&D investment by European firms? Evidence from a panel of manufacturing firms in France, Germany, and Italy," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 971-993, September.
    12. Hanna Hottenrott & Bronwyn H. Hall & Dirk Czarnitzki, 2016. "Patents as quality signals? The implications for financing constraints on R&D," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(3), pages 197-217, April.
    13. Giammario Impullitti, 2007. "International Schumpeterian Competition and Optimal R&D subsidies," Economics Working Papers ECO2007/55, European University Institute.
    14. Jacques Mairesse & Pierre Mohnen, 1990. "Recherche-Développement et productivité : un survol de la littérature économétrique," Économie et Statistique, Programme National Persée, vol. 237(1), pages 99-108.
    15. Kaiser, Ulrich, 2009. "Patents and profit rates," Economics Letters, Elsevier, vol. 104(2), pages 79-80, August.
    16. Jacques Mairesse, 2008. "Employment, innovation, and productivity: evidence from Italian microdata," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 17(4), pages 813-839, August.
    17. Zvi Griliches, 1998. "Productivity, R&D, and Basic Research at the Firm Level in the 1970s," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 82-99, National Bureau of Economic Research, Inc.
    18. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    19. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
    20. Dirk Czarnitzki & Cindy Lopes-Bento, 2014. "Innovation Subsidies: Does the Funding Source Matter for Innovation Intensity and Performance? Empirical Evidence from Germany," Industry and Innovation, Taylor & Francis Journals, vol. 21(5), pages 380-409, July.

    More about this item

    Keywords

    Healthcare; Healthcare Firms; Financial Performance;
    All these keywords.

    JEL classification:

    • A30 - General Economics and Teaching - - Multisubject Collective Works - - - General
    • A32 - General Economics and Teaching - - Multisubject Collective Works - - - Collective Volumes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2017-03-92. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.