Managerial ability, intellectual property rights, R&D: does firm age play a role?

What is it about?

This article explores how the abilities of top managers in pharmaceutical companies affect their investments in research and development (R&D) and how intellectual property rights (IPRs) play a role in this process. We know that managers play a crucial role in an organization's decisions and outcomes. However, intellectual managers are skilled in critical thinking, problem-solving, and strategic planning, making them essential in pharmaceutical industries. The pharmaceutical industry's R&D process is complex, and R&D is vital for creating new drugs. In this article, we found that managers with more intellectual abilities tend to be selective in their R&D investments, focusing on projects that create value. However, managers with lower abilities may invest more in R&D to gain a good reputation. Intellectual managers in pharmaceutical companies are well-versed in drug development, so they don't invest in R&D recklessly. In contrast, managers with lower abilities might be more willing to undertake additional R&D projects. We also found that strong IPRs motivate companies to invest in R&D to protect their innovations from being copied. However, younger pharmaceutical companies invest heavily in R&D to establish themselves, while older ones focus more on protecting their existing innovations. When managers with intellectual abilities are in a favourable IPR environment, they tend to invest more in R&D. This trend can be different for older and younger companies due to their unique strategies. This research helps us understand how intellectual managers and IPRs impact innovation and investment in the pharmaceutical industry.

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