Predicting the reputation of pharmaceutical firms with financing and geographical location data

Abstract

Reputation is a strategic asset for firms, but has been poorly studied in the pharmaceutical industry, particularly in relation to their financial and stock-market performance. This work aimed to predict the probability of a firm being included in a pharmaceutical reputation index (Merco and PatientView), and the position it occupies, according to its economic–financial and stock-market outcomes and its geographical location. Fifty firms with excellent sales in 2019 and their rankings in 2017–2019 were employed. The methodology followed was logistic regression. Their research and development (R&D) expenditures and dividends strongly influenced them being included in both rankings. Non-Asian pharmaceutical companies were more likely to belong to the two reputation indices than Asian ones, and to occupy the best positions in the Merco ranking. Although no large differences appeared in the firms in both indices, differences were found in the position that pharmaceutical companies occupied in rankings and in the variables that contribute to them occupying these positions. Being in PatientView influenced dividends, sales, and income, while appearing in Merco showed accounting aspects like value in books and debt ratio.