Honors Capstone Project
Date of Submission
Capstone Prize Winner
Won Capstone Funding
Business Administration, Management, and Operations
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.
Fannon, Ryan, "Innovation in Academic Institutions: How a Pharmaceutical Company Capitalizes on University Connections in its Board of Directors" (2010). Honors Capstone Projects - All. 367.
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