Abstract
This study examines if differences in the financial performance of companies managing retail pharmacies can be detected based on governance factors. These factors refer to ownership type, group belonging, and a number of retail pharmacies owned. Based on a sample of 116 companies managing retail pharmacies in Italy, analyses of variance are conducted to assess the effects of governance factors on financial performance considering profitability, liquidity, and leverage ratios. Results showed that privately-owned companies tended to perform better than publicly owned and mixed ownership companies. Further, independent companies presented better financial performance than companies belonging to a group, while companies managing a single store presented better financial performance than those with multiple stores. This work sheds light on the governance factors that have an effect on companies managing retail pharmacies’ financial performance. It contributes to the literature suggesting that private ownership can foster companies’ profitability, also in the form of mixed ownership, and discusses the findings with reference to policymaking and practitioners’ utility. The paper is the first contribution to a field that is quite under-investigated, concerning the drivers of financial performance, as pharmacies represent a public service combining both profitability orientation and the accomplishment of social interest.
Highlights
The healthcare industry plays a key role in the economy of most Western countries
This study examines if differences in the financial performance of companies managing retail pharmacies can be detected based on governance factors
The results indicate that in a regulated market, such as one of the retail pharmacies, private ownership can guarantee a higher capacity to sustain short-term debt compared to state ownership
Summary
The healthcare industry plays a key role in the economy of most Western countries. Organizations that distribute drugs are industry players that contribute to the effectiveness of healthcare systems. Pharmacies are public service organizations whose mission is to deliver drugs to final consumers in a timely manner. It can be argued that pharmacies have a hinge role between a country’s healthcare system and its citizens. Countries’ policies that regulate pharmacies’ activity may differ based on the characteristics of the national health system, market liberalization, and the number and type of players admitted. In the last twenty years, the institutional environment of pharmacies has undergone significant changes due to deregulation policies and the consequent competition, which derived from new market players within the drugs distribution and healthcare services delivery segments
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