Original scientific paper
https://doi.org/10.17818/DIEM/2021/1.5
THE PROFITABILITY DETERMINANTS OF THE GLOBAL PHARMACEUTICAL & BIOTECHNOLOGY COMPANIES DURING THE COVID-19 PANDEMIC
Boris Tušek
orcid.org/0000-0002-0942-4761
; Department of Accounting, Faculty of Economics & Business, University of Zagreb, Croatia
Ana Ježovita
orcid.org/0000-0002-1740-6862
; Department of Accounting, Faculty of Economics & Business, University of Zagreb, Croatia
Petra Halar
orcid.org/0000-0002-1129-699X
; Department of Accounting, Faculty of Economics & Business, University of Zagreb, Croatia
Abstract
In today's chaotic, complex, unpredictable, and extremely dynamic business environment, it is more than ever essential to operate in a way that will ensure sustainable operations and demand for companies’ goods or services. Employing contemporary corporate governance, advanced information technology, and adequate financial management are significant foundations for sustaining high profitability and adequate financial stability as crucial objectives that ensure adding value for companies' owners. Covid-19 is an excellent stress test for every entity, as for micro-companies, so for the largest multinational corporations. Nowadays, in the era of the world Covid-19 pandemic, companies challenge to maintain business operations and going concern assumption. However, in every crisis or adverse situation, some companies take enormous benefits of it. Pharmaceutical and biotechnology companies can be characterized as the major players during this last, still actual crisis. Their role can be observed from two angles, first as a provider of necessary drugs for curing Covid-19 patients and from the other side, as a developer of effective and efficient vaccine which will ‘save the world’ and brought us back to the ‘old normal’. This paper seeks to investigate financial determinants that are the most significant for the profitability of the pharmaceutical and biotechnology companies. The question is how those companies coped with the Covid-19 crisis, and what is the impact on their profitability in 2020 compared to previous operating years? Another question is how is the development of the vaccine financed and are R&D expenses significantly increased in 2020? Therefore, the objective of the paper is to investigate the impact of the Covid-19 crisis on the profitability of global pharmaceutical and biotechnology companies. The research covers 52 entities on the global level for the period from 2010 to 2020. Data will be analysed by applying adequate panel data analysis and moderator regression analysis.
Keywords
profitability ratios; pharmaceutical and biotechnology companies; Covid-19
Hrčak ID:
261891
URI
Publication date:
7.9.2021.
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