Influence of Top Management Characteristics on the Innovative Development of the World’s Top Companies in the Pharmaceutical Industry

Nikita A. Tolstov 1, Andrey A. Knyazev 2

1 Moscow University of Finance and Law, Moscow, Russia
2 SYNERGY University, Moscow, Russia

Abstract

Changes in the pharmaceutical industry lead to the need for detailed consideration of the issues of stimulating innovation, where top management largely determines the company's strategy of innovative development. Thus, it is important to study which characteristics of top management's human capital influence the innovation activity of pharmaceutical companies in creating new products. This article tests a hypothesis that the success of a pharmaceutical company's drug portfolio depends on ideas arising from basic research and large-scale commercialization that recoup high development costs, which in turn are influenced by the personal characteristics of top managers. The study is an econometric analysis of the impact of human capital elements, represented by top management characteristics, on the innovation activity of major pharmaceutical companies, where two models on patents and R&D were tested using panel regression. The models were tested using data from the world’s top 100 pharmaceutical companies from 2010 to 2022. The results made it possible to compile an average portrait of the top manager of the largest pharmaceutical companies. The analysis has shown that professional experience, age, as well as a job-specific degree can have a significant impact on innovation activity. The study contributes to the literature as it makes it possible to predict the innovation strategy of pharmaceutical companies through an average portrait of the top manager. The proposed model will reduce the number of failures of innovative directions, optimize the time period of commercialization of new drug development projects and can be used in other research studies.

Keywords

innovative activity; R&D; patent; top management; human capital

JEL classification

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About Authors

Nikita Alekseevich Tolstov

Post-Graduate Student, Moscow University of Finance and Law, Moscow, Russia (117342, Moscow, Vvedenskogo street, 1а); ORCID https://orcid.org/0009-0009-3230-888X е-mail: nickita.tolstov@yandex.ru 

Andrey Aleksandrovich Knyazev

Post-Graduate Student, SYNERGY University, Moscow, Russia (105318, Moscow, Izmailovsky Val street, 2); ORCID https://orcid.org/0000-0003-1850-7857 е-mail: ak290599@yandex.ru

For citation

Tolstov, N.A., Knyazev, A.A. (2024). Influence of Top Management Characteristics on the Innovative Development of the World’s Top Companies in the Pharmaceutical Industry. Journal of Applied Economic Research, Vol. 23, No. 3, 855-875. https://doi.org/10.15826/vestnik.2024.23.3.034

Article info

Received April 1, 2024; Revised May 7, 2024; Accepted June 5, 2024.

DOI: https://doi.org/10.15826/vestnik.2024.23.3.034

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