Innovation and R&D Activities in China’s Biotechnology and Pharmaceutical Sectors
School of Business and Economics, Wilfrid Laurier University, Waterloo, Ontario, Canada
- *Corresponding Author:
- Tao Zeng
Associate Professor, School of Business and Economics
Wilfrid Laurier University, Waterloo, Ontario, Canada
E-mail: [email protected]
Received May 28, 2013; Accepted July 01, 2013; Published July 05, 2013
Citation: Zeng T (2013) Innovation and R&D Activities in China’s Biotechnology and Pharmaceutical Sectors. J Bus & Fin Aff 2:110. doi:10.4172/2167-0234.1000110
Copyright: © 2013 Zeng T. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
This paper examines innovation and R&D expenditures in China’s biotechnology and pharmaceutical sectors. We found that R&D spending for these industries was much lower than spending in operating activities, which suggests a suboptimal allocation of resources. We also found that the proportion of intangible assets to total assets (including patents, trademarks and licenses) were also much lower than those in industrialized countries such as Canada and the U.S. We also examined other factors that were associated with R&D spending in these sectors. Using the China Stock Market Financial Statement Database and the SINA financial database, it was found that Chinese biotechnology and pharmaceutical firms’ expenditures in R&D activities are positively associated with ownership structure, but negatively associated with firm size, and with investments in other assets including inventory and fixed assets.