The Impact of Marketing Investments in Business Intelligence on Firm's Value: the Case of Pharmaceutical Market

The aim of the research is to study the impact of investment in business intelligence (BI – systems that provide access to analytics and data, used in decision-making process) on the value of pharmaceutical companies. The economic theory and review of the market for BI solutions in the pharmaceutical industry became the scientific basis for positioning BI technologies as organizational intellectual capital. Accumulated scientific experience allowed us to identify the main approaches of BI evaluation as an intangible asset and to analyse the modification of event and factor analysis, which help to catch the exogenous effect of BI implementation. The latter was chosen for the empirical model due to the possibility of assessing the impact of investments in BI on market indicators in the long run, taking into account company-specific factors, concerning pharmaceutical industry. The model of empirical analysis with a fixed effect is represented by the dependence of the logarithm of the companies’ market capitalization on investments in marketing, R&D, a dummy variable of investments in BI and net income. The sample consists of 24 public pharmaceutical companies that have implemented BI technologies during the period from 1999 to 2018, according to Factiva and Capital IQ data bases. The study verified the hypothesis that marketing investments in BI and R&D have a positive impact on the value of pharmaceutical companies. However, the coefficient for investment in marketing turned out to be insignificant. Presumably, due to the fact that in the pharmaceutical industry the effect of marketing investment appears after one year, whereas the model takes into account the one-year lag. Thus, the study reveals the motivation for investing in BI from the point of view of managing the value of companies in the pharmaceutical market, which contributes to the development of industry-specific empirical research and practice of introducing BI for strategic purposes.