Medical Journal of The Islamic Republic of Iran (MJIRI)
Iran University of Medical Sciences
Mon, Jun 1, 2026
[Archive]
Volume 40, Issue 1 (1-2026)
Med J Islam Repub Iran 2026 |
Back to browse issues page
Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:
Zare M, Hadian M, Tahmasebi A. The Determinants of Profitability in Iran’s Pharmaceutical Industry: A Panel Data Analysis. Med J Islam Repub Iran 2026; 40 (1) :220-227
URL: http://mjiri.iums.ac.ir/article-1-9991-en.html
URL: http://mjiri.iums.ac.ir/article-1-9991-en.html
Department of Health Economics, School of Health Management and Information Sciences, Iran University of Medical Sciences, Tehran, Iran , hadian.m@iums.ac.ir
Abstract: (127 Views)
Background: Profitability is a fundamental aspect of corporate survival in the pharmaceutical industry, shaped by both firm-level and macroeconomic factors. In Iran, the sector encounters challenges such as reliance on imports, inflation, and sanctions, alongside a lack of empirical evidence regarding the determinants of profitability. This study aims to fill this gap by investigating these factors in listed firms.
Methods: Panel data from 28 companies listed on the Tehran Stock Exchange (2009–2023) were analyzed using fixed-effects Feasible Generalized Least Squares (FGLS) regression. The dependent variables were return on assets (ROA) and return on equity (ROE). The independent variables included firm-specific factors (e.g., leverage, sales growth) and macroeconomic factors (e.g., GDP, inflation). Diagnostic tests, including unit root, cointegration, and heteroskedasticity tests, were conducted.
Results: Results indicated that GDP, money supply, and sales growth were positively associated with profitability. Conversely, interest rates, exchange rates, inflation, government expenditure, leverage, P/E ratio, and liquidity ratios exhibited negative associations. The effects of firm size and tax revenue were mixed. The models accounted for 69–89% of the variation (R-squared), with significant F-statistics (P<0.001). The hypotheses were confirmed, partially supported, or contradicted, as summarized.
Conclusion: The profitability of Iranian pharmaceuticals is susceptible to macroeconomic volatility and firm-specific strategies. It is imperative that policies are implemented to stabilize exchange rates and promote domestic production to enhance sustainability.
Methods: Panel data from 28 companies listed on the Tehran Stock Exchange (2009–2023) were analyzed using fixed-effects Feasible Generalized Least Squares (FGLS) regression. The dependent variables were return on assets (ROA) and return on equity (ROE). The independent variables included firm-specific factors (e.g., leverage, sales growth) and macroeconomic factors (e.g., GDP, inflation). Diagnostic tests, including unit root, cointegration, and heteroskedasticity tests, were conducted.
Results: Results indicated that GDP, money supply, and sales growth were positively associated with profitability. Conversely, interest rates, exchange rates, inflation, government expenditure, leverage, P/E ratio, and liquidity ratios exhibited negative associations. The effects of firm size and tax revenue were mixed. The models accounted for 69–89% of the variation (R-squared), with significant F-statistics (P<0.001). The hypotheses were confirmed, partially supported, or contradicted, as summarized.
Conclusion: The profitability of Iranian pharmaceuticals is susceptible to macroeconomic volatility and firm-specific strategies. It is imperative that policies are implemented to stabilize exchange rates and promote domestic production to enhance sustainability.
Policy Review: Original Research |
Subject:
Health Management and Economics
Send email to the article author
| Rights and permissions | |
 |
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. |
