Capital Structure Decisions in the Biopharmaceutical Industry

Abstract

In this paper we deal with the capital structure problem in the pharmaceutical industry that has recently changed its business model because of the biotechnology advent. We propose a set of hypotheses that explains the drivers of capital structure decision in this industry and then we test their validity over a sample of 50 biopharmaceutical firms. The obtained results show that pecking order theory is suitable to explain intra industry differences in capital structure while growth opportunities are the most explicative variable.