Asian Journal Of Social Pharmacy

Objective To empirically test the effect of market competition on R&D investment, and to separately examine the moderating effect of executive compensation incentives and equity incentives on their relationship. Methods The data of some Chinese-listed pharmaceutical companies from 2013-2021 were used to make the investigation. Results and Conclusion Market competition had a facilitating effect on R&D investment in Chinese pharmaceutical companies, and the level of executive compensation incentives and equity incentives positively moderated their relationship. Further heterogeneity tests revealed that a fiercely competitive market environment promoted R&D investment more in non-state enterprises and larger enterprises. The findings of the study are important for pharmaceutical companies to improve their independent research and development as well as to implement the right model of executive incentives in the face of external market competition.