Foundation vs. Non-Foundation - A study of ownership structure and financial performance in the pharmaceutical industry

Abstract

This study focuses on the ownership structure in the pharmaceutical industry with emphasis on foundations and their impact on financial performance. Our study will examine whether non-foundation owned companies perform better than the foundation owned. We will also further discuss the advantages and disadvantages of foundation ownership. In order to examine the financial performance, we use a statistical program that compares the financial measurement of Tobin’s Q, Return on Asset (ROA) and Jensen’s alpha. The final results showed no significant performance difference between foundation owned and non-foundation owned pharmaceutical companies. This study may be provided as a base for the argument of optimal ownership structure for pharmaceutical companies. The study implies that, despite the advantages and disadvantages, foundation owned companies do not perform significantly better or worse than non-foundation owned firms. Foundations may contribute to the innovation and development in the industry and a future study with more samples could create a better view of which ownership structure that is more advantageous for pharmaceutical firms