Author

Ryan Fannon

Degree Type

Honors Capstone Project

Date of Submission

Spring 5-1-2010

Capstone Advisor

Ravi Dharwadkar

Honors Reader

Pamela Brandes

Capstone Major

Business Administration

Capstone College

Management

Audio/Visual Component

no

Capstone Prize Winner

yes

Won Capstone Funding

no

Honors Categories

Professional

Subject Categories

Business Administration, Management, and Operations

Abstract

This study attempts to identify the types of pharmaceutical companies that utilize university employees as directors on their boards and if in fact having university connections on a pharmaceutical board impacts company performance. Board-level data from 2009 and firm-level data from 2008 was gathered for 109 pharmaceutical companies that varied greatly in size and geographic location. The key findings of this study were that the larger the pharmaceutical company and the greater the R&D expense of that company the more likely the company would have university connections on its board of directors; the larger the company, the better the universities and medical schools these directors would be employed at. These connections are believed to symbolize and secure strategic alliances between pharmaceutical companies and academic institutions. Pharmaceutical companies can therefore tap into innovative research pipelines at these universities for new drug discovery and development. While there was not strong evidence that university connections on a pharmaceutical board directly impacted company performance, larger pharmaceutical companies, who were more likely to utilize such connections, did yield greater earnings per share and return on assets than smaller companies, who were less likely to utilize such connections on their boards.

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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