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Macroeconomic factors, liquidity issues and research and development investments: empirical evidence from the EU pharmaceutical industry

Author

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  • Mihaela CUREA

    (Alexandru Ioan Cuza University of Iasi, Romania)

  • Iuliana Ungureanu

    (Alexandru Ioan Cuza University of Iasi, Romania)

  • Marilena Mironiuc

    (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.

Suggested Citation

  • Mihaela CUREA & Iuliana Ungureanu & Marilena Mironiuc, 2023. "Macroeconomic factors, liquidity issues and research and development investments: empirical evidence from the EU pharmaceutical industry," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 14, pages 261-283, June.
    • Handle: RePEc:jes:journl:y:2023:v:14:p:261-283
    DOI: https://doi.org/10.47743/ejes-2023-0113
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