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The Korea Contents Association (한국콘텐츠학회)
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The Impact of Unfair Trade Restrictions on Corporate Behavior and Financial Performance of Pharmaceutical Companies: The Dual Punishment System in Korea

  • Kim, Hyun-jung (Department of Computer Science & Engineering College of Engineering, Ewha Womans University) ;
  • Noh, Jin-Won (Department of Healthcare Management Eulji University, Department of Health Sciences, Global Health, University Medical Centre Groningen/University of Groningen) ;
  • Hong, Jin Hyuk (Department of Biostatistics Korea University College of Medicine) ;
  • Kwon, Young Dae (Department of Humanities and Social Medicine College of Medicine and Catholic Institute for Healthcare Management, the Catholic University of Korea)
  • Received : 2016.09.30
  • Accepted : 2016.12.23
  • Published : 2016.12.28
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Abstract

This study aims to evaluate the effectiveness of the dual-punishment system by analysis of the financial performance of pharmaceutical companies before and after introduction of the dual-punishment system. This study analyzed the business performance of 136 pharmaceutical companies from 2009 to 2011. The results from paired t-tests found that sales, operating cost, and EBITDA showed significant differences in performance, and, according to the variance analysis, the five groups obtained through a hierarchical cluster analysis differed from each other in sales, operating cost, EBITDA, and research and development cost. Differences in financial performance among the groups seem to be related to the strategy for response to the regulation. The introduction of the dual-punishment system is generally acknowledged to have had positive effects on the pharmaceutical industry. However, some companies appear to be continuing kickback practices.

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References

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