Central European Management Journal

Estimating R&D Returns In Health Care Industry

Karpa, Waldemar Nowakowski, Jakub

Kozminski University

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Purpose: This paper provides an empirical evaluation of R&D returns for a series of global companies who lead in innovation within the health care industry.

Methodology: The estimation procedure bases on two specifications: the parametric production function setting, and finite distributed lag model (FDL).

Findings: Using the most recent data on R&D investment by health care equipment and services along pharmaceuticals and biotechnology companies, we confirm the positive albeit mitigated impact of R&D efforts on performance indicators (levels of sales). Moreover, we comment on the current phenomena observed in health care industry and offer a policy view for ongoing and future challenges in the sector.

Added value: Since there is a dearth of recent empirical evidence on R&D returns in the broad health industry, this paper offers the evaluation of economic incentives for companies to invest in R&D. These incentives embrace the induced increase in sales and profits levels. The authors participate in a public debate concerning the optimal levels of R&D rewards required to sustain the innovation within the sector.


Journal Central European Management Journal 
Volume 26 
Issue 2 
Issue date 2018 
Type Article 
Language en
Pagination 34-46
DOI 10.7206/jmba.ce.2450-7814.227
ISSN 2658-0845
eISSN 2658-2430