CHAPTER 7 IMPACT OF FDI ON THE GROWTH OF …shodhganga.inflibnet.ac.in/bitstream/10603/20623/14/14_chapter 7.pdf · 270 CHAPTER 7 IMPACT OF FDI ON THE GROWTH OF PHARMACEUTICAL SECTOR

270

CHAPTER 7

IMPACT OF FDI ON THE GROWTH OF PHARMACEUTICAL

SECTOR IN INDIA

This Chapter deals with assessing the impact of FDI on the Growth of

Pharmaceutical Sector in India. Promoters pattern i.e percentage of

Foreign Promoters in the capital structure of the companies (based upon

IMF, BOP, Definition) and amount of FDI separately have been

considered as independent variables and selected financial ratios and

variables are considered as dependent variables. Simple regression

analysis has been run using SPSS 16.0 version to assess the impact of

FDI on the growth of Indian Pharmaceutical Sector.

Eighteen (18) FDI-based companies, consistently listed have been

considered for the study. The analysis has been carried out for the

companies on both individual basis and aggregate basis. This Chapter is

divided into two (2) parts. Part I and Part II

Part I: It deals with assessing the Impact of FDI (Rs. Crores)) on Select

Financial Variables (Rs. Crores) considering Individual and Aggregate

parameters

Part II: It deals with assessing the Impact of FDI (foreign promoter quota)

on the Financial Performance ( both expressed in percentages) of Selected

FDI-based Pharmaceutical Companies considering Individual and

Aggregate parameters

271

Part I:

7.1 IMPACT OF FDI (QUANTUM) ON SELECT FINANCIAL VARIABLES:

AN ANALYSIS BASED ON INDIVIDUAL PARAMETERS

In case of individual analysis, FDI (amount in Rupees crores) is considered as

independent variable and selected variables (amount in Rupees crores) as

dependent variables. 18 FDI based companies have been considered for the

purpose of analysis . For each company FDI is considered as independent

variable and selected three (3) financial variables i.e Sales, PBIT and Capital

employed are considered as dependent variables.

7.1.1 Impact of FDI on Sales:

The regression analysis run to assess the impact of FDI on sales of FDI-based

companies reveal that FDI significantly influences the sales in the case of

following companies (see table 7.1a and 7.1b)

• Astrazeneca Pharma India Ltd with an R square value of .451 and beta(t)

value of 2.565 with significance value of .033

• Fulford (India) Ltd with an R square value of .692 and beta(t) value of

4.244 with significance value of .003

• Glaxosmithkline Pharmaceuticals Ltd with an R square value of .833 and

beta(t) value of 6.328 with significance value of .000

• K D L Biotech Ltd with an R square value of .708 and beta(t) value of


• Merck Ltd with an R square value of .453 and beta(t) value of 2.576 with

significance value of .033

272

• Novartis India Ltd with an R square value of .424 and beta(t) value of


• Pfizer Ltd with an R square value of .440 and beta(t) value of 2.505 with

significance value of .037

• Solvay Pharma India Ltd with an R square value of .667 and beta(t) value

of 3.744 with significance value of .007

Table: 7.1a FDI and Sales Model Summary

Company Model R R Square

Adjusted R Square

Std. Error of the Estimate

Abbott India 1 195a .038 -.082 152.920147

Astrazeneca Pharma India Ltd 1 .672a .451 .383 87.698025

Aventis Pharma Ltd. 1 .404a .164 .059 204.433428

Biocon Ltd. 1 .691a .478 .347 145.571391

Fresenius Kabi Oncology Ltd 1 .513a .263 -.106 85.533441

Fulford (India) Ltd 1 .832a .692 .654 17.022585

Glaxosmithkline Pharmaceuticals Ltd. 1 .913a .833 .813 148.870507

Kerala Ayurveda Ltd. 1 .648a .420 .324 47.743567

K D L Biotech Ltd. 1 .842a .708 .672 2.174625

Matrix Laboratories Ltd. 1 .666a .443 .258 287.644803

Merck Ltd. 1 .673a .453 .385 40.987064

Novartis India Ltd. 1 .651a .424 .352 54.421246

Pfizer Ltd. 1 .663a .440 .369 132.372113

Solvay Pharma India Ltd. 1 .817a .667 .619 36.428258

Wanbury Ltd. 1 .216a .047 -.271 124.021940

Wyeth Ltd 1 .220a .049 -.070 36.923387

273

Table: 7.1b FDI and Sales

Coefficients

Company Model Unstandardized

Coefficients Standardized Coefficients t Sig.

B Std. Error Beta

Abbott India 1 (Constant) -52.050 1030.949 -.050 .961

FDI 61.516 109.310 .195 .563 .589

Astrazeneca Pharma India Ltd

1 (Constant) -165.426 160.124 -1.033 .332

FDI 97.345 37.945 .672 2.565 .033

Aventis Pharma Ltd.

1 (Constant) -529.946 1072.482 -.494 .634

FDI 113.714 90.903 .404 1.251 .246

Biocon Ltd. 1 (Constant) 546.063 189.447 2.882 .045

FDI 24.541 12.834 .691 1.912 .128

Fresenius Kabi Oncology Ltd

1 (Constant) 281.476 60.501 4.652 .043

FDI 5.075 6.009 .513 .844 .487

Fulford (India) Ltd 1 (Constant) 55.209 22.707 2.431 .041

FDI 58.618 13.814 .832 4.244 .003

Glaxosmithkline Pharmaceuticals Ltd.

1 (Constant) -1308.823 442.802 -2.956 .018

FDI 70.162 11.088 .913 6.328 .000

Kerala Ayurveda Ltd. 1 (Constant) 408.064 138.675 2.943 .026

FDI -55.713 26.720 -.648 -2.085 .082

K D L Biotech Ltd. 1 (Constant) 11.299 1.020 11.075 .000

FDI 1.044 .237 .842 4.407 .002

Matrix Laboratories Ltd. 1 (Constant) 261.285 458.491 .570 .609

FDI 37.372 24.183 .666 1.545 .220

Merck Ltd. 1 (Constant) -4785214.411 1857480.7

38 -2.576 .033

FDI 556555.556 216020.796 .673 2.576 .033

Novartis India Ltd. 1 (Constant) 249.668 121.622 2.053 .074

FDI 34.201 14.087 .651 2.428 .041

Pfizer Ltd. 1 (Constant) 278.040 162.929 1.707 .126

FDI 32.463 12.961 .663 2.505 .037

Solvay Pharma India Ltd.

1 (Constant) -1094.120 332.024 -3.295 .013

FDI 368.958 98.553 .817 3.744 .007

Wanbury Ltd. 1 (Constant) 158665.165 413159.217 .384 .727

FDI -52398.653 136596.424

-.216 -.384 .727

Wyeth Ltd 1 (Constant) 232.976 148.397 1.570 .155

FDI 8.555 13.385 .220 .639 .541

274

7.1.2 Impact of FDI on PBIT:

The regression analysis run to assess the impact of FDI on sales of FDI-

based companies reveal that FDI significantly influences the PBIT in the

case of following companies(see table 7.2a and 7.2b)

• Fulford (India) Ltd with an R square value of .515 and beta(t) value


• Glaxosmithkline Pharmaceuticals Ltd with an R square value of

.809 and beta(t) value of 5.825 with significance value of .000

• K D L Biotech Ltd with an R square value of .548 and beta(t) value


• Kerala Ayurveda Ltd with an R square value of .728 and beta(t)


• Solvay Pharma India Ltd with an R square value of .557 and beta(t)


275

Table: 7.2a FDI and PBIT Model Summary

Company Model R R Square Adjusted R Square


Abbott India 1 .006a .000 -.125 20.919036


Aventis Pharma Ltd. 1 .287a .082 -.032 81.250253

Biocon Ltd. 1 .234a .055 -.182 127.447214

Fresenius Kabi Oncology Ltd 1 .466a .218 -.174 101.831590




K D L Biotech Ltd. 1 .740a .548 .491 1.323414

Matrix Laboratories Ltd. 1 .252a .063 -.249 234.864511

Merck Ltd. 1 .037a .001 -.123 35.515218


Pfizer Ltd. 1 .273a .075 -.041 148.620377


Wanbury Ltd. 1 .140a .020 -.307 32.506452

Wyeth Ltd 1 .558a .312 .226 29.204164

276

Table: 7.2b FDI and PBIT

Coefficients

Company Model Unstandardized Coefficients

Standardized Coefficients t Sig.

B Std. Error Beta

Abbott India 1 (Constant) 98.576 141.031 .699 .504

FDI -.242 14.953 -.006 -.016 .987


1 (Constant) -62.605 58.622 -1.068 .317

FDI 28.830 13.892 .592 2.075 .072

Aventis Pharma Ltd. 1 (Constant) -180.744 426.248 -.424 .683

FDI 30.635 36.129 .287 .848 .421


FDI -5.400 11.236 -.234 -.481 .656


1 (Constant) 99.320 72.030 1.379 .302

FDI -5.336 7.154 -.466 -.746 .534

Fulford (India) Ltd 1 (Constant) -20.319 12.901 -1.575 .154

FDI 22.867 7.848 .718 2.914 .019


1 (Constant) -1856.441 405.018 -4.584 .002

FDI 59.071 10.142 .900 5.825 .000


FDI -14.732 3.673 -.853 -4.011 .007

K D L Biotech Ltd. 1 (Constant) .942 .621 1.517 .168

FDI -.449 .144 -.740 -3.114 .014

Matrix Laboratories Ltd. 1 (Constant) 279.787 374.362 .747 .509

FDI -8.893 19.746 -.252 -.450 .683

Merck Ltd. 1 (Constant) -166720.240 1609503.721 -.104 .920

FDI 19400.000 187181.632 .037 .104 .920

Novartis India Ltd. 1 (Constant) 22.386 71.947 .311 .764

FDI 12.710 8.333 .475 1.525 .166

Pfizer Ltd. 1 (Constant) 32.662 182.928 .179 .863

FDI 11.678 14.552 .273 .803 .445


1 (Constant) -302.119 112.449 -2.687 .031

FDI 99.072 33.378 .746 2.968 .021


FDI -8771.279 35802.255 -.140 -.245 .822

Wyeth Ltd 1 (Constant) -140.956 117.373 -1.201 .264

FDI 20.153 10.587 .558 1.904 .093

277

7.1.3 Impact of FDI on Capital Employed:

The regression analysis run to assess the impact of FDI on sales of FDI-

based companies reveal that FDI significantly influences the Capital

Employed in the case of following companies(see table 7.3a and 7.3b)

• Fulford (India) Ltd with an R square value of .952 and beta(t) value


• Glaxosmithkline Pharmaceuticals Ltd with an R square value of


• K D L Biotech Ltd with an R square value of .904 and beta(t) value


• Kerala Ayurveda Ltd. with an R square value of .515 and beta(t)


• Novartis India Ltd. with an R square value of .419 and beta(t)


• Pfizer Ltd. with an R square value of .627 and beta(t) value of 3.670

with significance value of .006

• Solvay Pharma India Ltd. with an R square value of .739and


• Wyeth Ltd with an R square value of .623 and beta(t) value of


278

Table: 7.3a FDI and Capital Employed

Model Summary

Company Model R R Square

Adjusted R Square


Abbott India 1 .545a .297 .209 49.156125


Aventis Pharma Ltd. 1 .590a .348 .267 216.614161

Biocon Ltd. 1 .706a .499 .373 307.972831

Fresenius Kabi Oncology Ltd 1 .738a .545 .318 85.747052




K D L Biotech Ltd. 1 .951a .904 .892 5.319659

Matrix Laboratories Ltd. 1 .594a .352 .137 152.081191

Merck Ltd. 1 .465a .216 .118 124.466732


Pfizer Ltd. 1 .792a .627 .581 196.775453


Wanbury Ltd. 1 .304a .092 -.210 156.672159

Wyeth Ltd 1 .790a .623 .576 26.766760

279

Table: 7.3b FDI and Capital Employed

Coefficients

Company Model Unstandardized


B Std. Error Beta

Abbott India 1 (Constant) -415.750 331.398 -1.255 .245

FDI 64.605 35.138 .545 1.839 .103


1 (Constant) -17.827 61.696 -.289 .780

FDI 32.059 14.620 .613 2.193 .060

Aventis Pharma Ltd. 1 (Constant) -1849.249 1136.384 -1.627 .142

FDI 199.054 96.319 .590 2.067 .073


FDI 54.152 27.153 .706 1.994 .117


1 (Constant) 464.891 60.652 7.665 .017

FDI 9.330 6.024 .738 1.549 .262

Fulford (India) Ltd 1 (Constant) -124.175 15.288 -8.123 .000

FDI 116.651 9.300 .976 12.543 .000


1 (Constant) -2308.420 835.278 -2.764 .025

FDI 83.295 20.915 .815 3.982 .004


FDI -39.399 15.606 -.718 -2.525 .045

K D L Biotech Ltd. 1 (Constant) 9.991 2.496 4.004 .004

FDI 5.041 .579 .951 8.699 .000

Matrix Laboratories Ltd. 1 (Constant) 554.906 242.410 2.289 .106

FDI 16.336 12.786 .594 1.278 .291

Merck Ltd. 1 (Constant) -8382407.288 5640671.289 -1.486 .176

FDI 974888.889 655997.275 .465 1.486 .176

Novartis India Ltd. 1 (Constant) -206.098 235.550 -.875 .407

FDI 65.478 27.282 .647 2.400 .043

Pfizer Ltd. 1 (Constant) -421.253 242.199 -1.739 .120

FDI 70.705 19.267 .792 3.670 .006


1 (Constant) -774.601 189.357 -4.091 .005

FDI 250.185 56.206 .860 4.451 .003


FDI -95368.343 172557.022 -.304 -.553 .619

Wyeth Ltd 1 (Constant) -151.837 107.577 -1.411 .196

FDI 35.313 9.703 .790 3.639 .007

280

7.2 IMPACT OF FDI (QUANTUM) ON SELECT FINANCIAL VARIABLES:

AN ANALYSIS BASED ON AGGREGATE PARAMETERS

In case of aggregate analysis, FDI (amount in Rupees crores) of 18

companies is considered as independent variable and selected three (3)

financial variables (amount in Rupees crores) i.e. Sales, PBIT and Capital

Employed of these companies as dependent variables. The analysis

reveals that FDI significantly influences the following variables(see table

7.4a and 7.5b)

• Sales with an R square value of .712 and beta(t) value of 4.449


• Capital Employed with an R square value of .812 and beta(t) value


Table: 7.4a

FDI and the Indian Pharmaceutical sector Model Summary

Table: 7.4b FDI and the Indian Pharmaceutical sector

Coefficients Dependent

variable Model Unstandardized


B Std. Error Beta Sales

1 (Constant) 5297.950 1291.490 4.102 .003

FDI 31.053 6.980 .844 4.449 .002

PBIT 1 (Constant) 1436.468 746.068 1.925 .090

FDI 3.941 4.032 .327 .977 .357

Capital Employed

1 (Constant) -136.168 1537.252 -.089 .932

FDI 52.547 8.309 .913 6.324 .000

dependent variable Model R R Square

Adjusted R Square


Sales 1 .844a .712 .676 1738.622462

PBIT 1 .327a .107 -.005 1004.367016

Capital Employed 1 .913a .833 .812 2069.470102

281

Part II :

7.3 IMPACT OF FDI (FOREIGN PROMOTER QUOTA) ON THE FINANCIAL

PERFORMANCE OF SELECTED FDI-BASED PHARMACEUTICAL COMPANIES

– AN ANALYSIS BASED ON INDIVIDUAL PARAMETERS.

In this case, FDI (as percentage of foreign promoter in the share

holding pattern of the company) is considered as independent variable

and financial ratios measured as dependent variables. 18 FDI based

companies have been considered for the purpose of analysis. For each

company FDI (% of foreign promoter) is considered as independent

variable and selected 18 financial ratios are considered as dependent

variables.

7.3.1 Impact of FDI on Profitability

7.3.1.1 FDI and Net Profit Margin: The regression analysis run to

assess the impact of FDI on NPM of FDI-based companies reveal that

FDI significantly influences the NPM in the case of following

companies(see table 7.5a and 7.5b)

• Kerala Ayurveda Ltd which have an R square value of .503 and

beta(t) value of 2.848 with significance value of .022 .

282

Table: 7.5a

FDI and NPM

Model Summary

.127a .016 -.107 6.552892

.580a .337 .254 4.020174

.555a .308 .221 6.579950

.180a .032 -.089 10.077704

.376a .141 -.031 25.990277

.578a .334 .251 6.967634

.589a .347 .265 12.216325

.317a .101 -.049 16.356319

.709a .503 .441 8.393741

.343a .118 .007 16.135614

.167a .028 -.094 9.020731

.246a .061 -.057 4.061180

.036a .001 -.124 17.820628

.452a .205 .105 17.954322

.595a .354 .273 3.269144

.262a .069 -.048 4.583670

.215a .046 -.090 10.046627

.586a .343 .261 6.967376

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

Company Aventis Pharma Ltd.

Abbott India Ltd.

Astrazeneca PharmaIndia Ltd.Biocon Ltd.

Fresenius KabiOncology Ltd.Fulford (India) Ltd.

GlaxosmithklinePharmaceuticals Ltd.K D L Biotech Ltd.

Kerala Ayurveda Ltd.

Matrix Laboratories Ltd.

Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.

Ranbaxy LaboratoriesLtd.Sandu PharmaceuticalsLtd.Solvay Pharma India Ltd.

Wanbury Ltd.

Wyeth Ltd.

R R SquareAdjustedR Square

Std. Error ofthe Estimate

Predictors: (Constant), FDI(%)a.

283

Table: 7.5b

FDI and NPM

Coefficients a

8.646 34.377 .252 .808

.243 .671 .127 .363 .726

50.997 15.917 3.204 .013

-.512 .254 -.580 -2.016 .079

-.900 12.014 -.075 .942

.268 .142 .555 1.885 .096

22.840 5.016 4.553 .002

.157 .304 .180 .516 .620

21.359 11.623 1.838 .126

-.219 .242 -.376 -.907 .406

-21.049 15.510 -1.357 .212

.680 .339 .578 2.005 .080

-412.891 214.999 -1.920 .091

8.865 4.299 .589 2.062 .073

-35.233 38.068 -.926 .390

1.093 1.335 .317 .819 .444

7.790 4.157 1.874 .098

-.278 .098 -.709 -2.848 .022

20.934 6.959 3.008 .017

-.165 .160 -.343 -1.033 .332

315.015 607.136 .519 .618

-5.705 11.886 -.167 -.480 .644

17.385 9.076 1.915 .092

.121 .168 .246 .718 .493

21.628 27.622 .783 .456

.063 .621 .036 .101 .922

17.450 6.348 2.749 .025

-.319 .222 -.452 -1.434 .189

9.860 1.887 5.224 .001

.175 .083 .595 2.094 .070

16.512 4.556 3.624 .007

.055 .072 .262 .769 .464

14.677 4.936 2.973 .021

-.158 .271 -.215 -.582 .579

-642.194 326.275 -1.968 .085

13.100 6.411 .586 2.044 .075

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.

Astrazeneca PharmaIndia Ltd.

Biocon Ltd.

Fresenius KabiOncology Ltd.

Fulford (India) Ltd.

GlaxosmithklinePharmaceuticals Ltd.

K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.

Ranbaxy LaboratoriesLtd.

Sandu PharmaceuticalsLtd.


Wanbury Ltd.

Wyeth Ltd.

B Std. Error

UnstandardizedCoefficients

Beta

StandardizedCoefficients

t Sig.

Dependent Variable: Net Profit Margina.

284

7.3.1.2 FDI and ROTA: The regression analysis run to assess the

impact of FDI on ROTA of FDI-based companies reveal that FDI

significantly influences the ROTA in the case of following companies(see

table 7.6a and 7.6b)

• Abbott India Ltd which have an R square value of .540 and beta(t)

value of .870 with significance value of .410 .

• Glaxosmithkline laboratories ltd which have an R square value of

.454 and beta(t) value of 2.579with significance value of .033

• Ranbaxy Laboratories Ltd. which have an R square value of .433

and beta(t) value of 2.472 with significance value of .039

• Solvay Pharma India Ltd. which have an R square value of 2.936

and beta(t) value of .519 with significance value of .019

Table: 7.6a

FDI and ROTA

Model Summary

.294a .086 -.028 4.727250

.735a .540 .482 4.198897

.578a .334 .251 6.234498

.001a .000 -.125 5.567351

.508a .258 .110 7.937519

.074a .005 -.119 14.730526

.674a .454 .386 3.395048

.161a .026 -.096 6.996072

.287a .082 -.033 4.062439

.553a .306 .219 10.249607

.423a .179 .077 5.085493

.192a .037 -.084 5.406481

.393a .155 .049 5.539453

.658a .433 .362 6.503065

.211a .045 -.075 1.169772

.720a .519 .459 5.052145

.158a .025 -.114 5.665396

.532a .283 .194 4.291151

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




285

Table: 7.6b

FDI and ROTA

Coefficients a

38.322 24.800 1.545 .161

-.421 .484 -.294 -.870 .410

73.035 16.625 4.393 .002

-.813 .266 -.735 -3.062 .016

-5.894 11.383 -.518 .619

.270 .135 .578 2.004 .080

13.855 2.771 5.000 .001

-.001 .168 -.001 -.003 .998

8.160 3.550 2.299 .070

-.097 .074 -.508 -1.320 .244

2.463 32.789 .075 .942

.151 .717 .074 .210 .839

-141.252 59.750 -2.364 .046

3.081 1.195 .674 2.579 .033

-1.340 6.365 -.210 .839

-.106 .230 -.161 -.462 .657

-2.277 2.012 -1.132 .290

-.040 .047 -.287 -.846 .422

14.828 4.421 3.354 .010

-.191 .102 -.553 -1.879 .097

470.112 342.277 1.373 .207

-8.855 6.701 -.423 -1.321 .223

24.543 12.083 2.031 .077

-.123 .224 -.192 -.552 .596

23.369 8.586 2.722 .026

-.233 .193 -.393 -1.209 .261

10.821 2.299 4.707 .002

-.199 .080 -.658 -2.472 .039

4.997 .675 7.399 .000

-.018 .030 -.211 -.612 .557

37.667 5.022 7.500 .000

-.233 .079 -.720 -2.936 .019

1.298 2.783 .466 .655

.064 .153 .158 .422 .686

-339.508 200.950 -1.690 .130

7.024 3.948 .532 1.779 .113

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: ROTAa.

286

7.3.1.3 FDI and RONW : The regression analysis run to assess the

impact of FDI on RONW of FDI-based companies reveal that FDI

significantly influences RONW in the case of following companies(see


• Abbott India Ltd. which have an R square value of .472 and beta(t)


• Matrix Laboratories Ltd. which have an R square value of .430 and


• Ranbaxy Laboratories Ltd. which have an R square value of .603 and


• Solvay Pharma India Ltd. which have an R square value of .938 and


Table: 7.7a FDI and RONW

Model Summary

.373a .139 .031 7.068159

.687a .472 .406 9.412998

.541a .292 .204 13.576463

.262a .069 -.048 11.575245

.292a .085 -.098 12.642371

.081a .007 -.118 42.975636

.515a .265 .173 12.054439

.109a .012 -.153 47.494455

.407a .165 .061 14.021806

.656a .430 .359 35.484449

.416a .173 .070 6.993741

.126a .016 -.107 3.227240

.140a .020 -.103 8.800190

.776a .603 .553 13.347274

.232a .054 -.064 1.534111

.968a .938 .930 6.518724

.010a .000 -.143 19.432309

.401a .161 .056 9.796292

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




287

Table: 7.7b

FDI and RONW

Coefficients a

66.235 37.080 1.786 .112

-.822 .724 -.373 -1.135 .289

137.621 37.269 3.693 .006

-1.593 .595 -.687 -2.676 .028

-14.647 24.789 -.591 .571

.534 .294 .541 1.818 .107

23.615 5.762 4.099 .003

-.269 .350 -.262 -.769 .464

5.532 5.654 .978 .373

-.080 .118 -.292 -.682 .525

-9.004 95.661 -.094 .927

.482 2.092 .081 .230 .824

-335.840 212.150 -1.583 .152

7.201 4.242 .515 1.697 .128

-6.549 110.541 -.059 .955

-1.043 3.876 -.109 -.269 .797

-8.570 6.945 -1.234 .252

-.205 .163 -.407 -1.259 .244

60.322 15.304 3.942 .004

-.864 .352 -.656 -2.457 .039

631.733 470.711 1.342 .216

-11.924 9.215 -.416 -1.294 .232

17.412 7.212 2.414 .042

.048 .133 .126 .360 .728

22.353 13.640 1.639 .140

-.123 .306 -.140 -.400 .700

19.363 4.719 4.103 .003

-.575 .165 -.776 -3.483 .008

6.720 .886 7.587 .000

-.026 .039 -.232 -.675 .519

108.147 6.480 16.690 .000

-1.125 .102 -.968 -10.992 .000

5.662 9.547 .593 .572

-.013 .524 -.010 -.026 .980

-543.744 458.750 -1.185 .270

11.170 9.013 .401 1.239 .250

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: RONWa.

288

7.3.1.4 FDI and ROCE: The regression analysis run to assess the

impact of FDI on ROCE of FDI-based companies reveal that FDI

significantly influences the ROCE in the case of following companies(see


• Abbott India Ltd. which have an R square value of .458 and




• Solvay Pharma India Ltd. which have an R square value of .937

and beta(t) value of 10.903with significance value of .000

Table: 7.8a FDI and ROCE

Model Summary

.375a .140 .033 7.271613

.677a .458 .390 9.275445

.564a .318 .233 11.279134

.139a .019 -.103 9.858579

.360a .130 -.044 10.146101

.099a .010 -.114 26.624947

.509a .259 .166 12.064707

.120a .014 -.150 23.773991

.348a .121 .011 5.365678

.633a .400 .325 21.658384

.427a .182 .080 6.905815

.187a .035 -.086 3.480782

.188a .035 -.085 8.674409

.731a .534 .475 11.472665

.239a .057 -.061 1.562437

.968a .937 .929 6.576046

.327a .107 -.021 10.671831

.392a .154 .048 9.726096

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




289

Table: 7.8a

FDI and ROCE

Coefficients a

68.297 38.148 1.790 .111

-.852 .745 -.375 -1.144 .286

132.927 36.724 3.620 .007

-1.525 .586 -.677 -2.601 .032

-11.263 20.594 -.547 .599

.471 .244 .564 1.931 .090

18.814 4.907 3.834 .005

-.118 .298 -.139 -.396 .703

5.350 4.537 1.179 .291

-.081 .094 -.360 -.863 .427

-2.731 59.265 -.046 .964

.364 1.296 .099 .281 .786

-330.951 212.330 -1.559 .158

7.101 4.246 .509 1.672 .133

-2.204 55.333 -.040 .970

-.574 1.940 -.120 -.296 .777

-3.392 2.658 -1.277 .238

-.065 .062 -.348 -1.049 .325

35.872 9.341 3.840 .005

-.496 .215 -.633 -2.310 .050

643.820 464.793 1.385 .203

-12.157 9.099 -.427 -1.336 .218

15.162 7.779 1.949 .087

.077 .144 .187 .537 .606

25.219 13.445 1.876 .098

-.164 .302 -.188 -.542 .603

18.032 4.056 4.445 .002

-.429 .142 -.731 -3.026 .016

6.750 .902 7.483 .000

-.028 .040 -.239 -.697 .506

108.135 6.537 16.543 .000

-1.126 .103 -.968 -10.903 .000

3.019 5.243 .576 .583

.263 .288 .327 .915 .391

-524.081 455.463 -1.151 .283

10.780 8.949 .392 1.205 .263

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: ROCEa.

290

7.3.2 Impact of FDI on Liquidity

7.3.2.1 FDI and Current Ratio: The regression analysis run to

assess the impact of FDI on Current Ratio of FDI-based companies

reveal that FDI significantly influences the Current ratio in the case of

following companies(see table 7.9a and 7.9b)



• Astrazeneca Pharma India Ltd. which have an R square value of


• Merck Ltd. which have an R square value of .657and beta(t) value


• Sandu Pharmaceuticals Ltd. which have an R square value of .419


Table: 7.9a FDI and Current Ratio

Model Summary

.396a .157 .052 .848469

.716a .513 .452 .455419

.729a .531 .473 .443505

.010a .000 -.125 .782703

.104a .011 -.187 .784542

.609a .371 .292 .956178

.132a .017 -.105 .388121

.034a .001 -.165 .320232

.545a .298 .210 .977964

.583a .340 .258 .170959

.810a .657 .614 .606770

.493a .243 .148 .194704

.433a .188 .086 .394960

.523a .274 .183 .407828

.647a .419 .346 .537635

.086a .007 -.117 .727612

.632a .400 .314 .440569

.606a .368 .289 .347179

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




291

Table: 7.9b

FDI and Current Ratio

Coefficientsa

-2.771 4.451 -.622 .551

.106 .087 .396 1.220 .257

-3.991 1.803 -2.213 .058

.084 .029 .716 2.901 .020

4.916 .810 6.071 .000

-.029 .010 -.729 -3.012 .017

2.022 .390 5.191 .001

.001 .024 .010 .028 .978

1.552 .351 4.423 .007

.002 .007 .104 .233 .825

-2.077 2.128 -.976 .358

.101 .047 .609 2.171 .062

3.845 6.831 .563 .589

-.051 .137 -.132 -.376 .717

.723 .745 .970 .369

.002 .026 .034 .082 .937

1.219 .484 2.516 .036

.021 .011 .545 1.841 .103

1.338 .074 18.144 .000

-.003 .002 -.583 -2.032 .077

-157.169 40.838 -3.849 .005

3.128 .799 .810 3.912 .004

2.376 .435 5.461 .001

-.013 .008 -.493 -1.603 .148

2.856 .612 4.665 .002

-.019 .014 -.433 -1.360 .211

1.520 .144 10.542 .000

-.009 .005 -.523 -1.737 .121

2.913 .310 9.386 .000

-.033 .014 -.647 -2.400 .043

2.723 .723 3.765 .006

-.003 .011 -.086 -.245 .812

1.855 .216 8.572 .000

-.026 .012 -.632 -2.158 .068

37.996 16.258 2.337 .048

-.689 .319 -.606 -2.157 .063

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: Current ratioa.

292

7.3.2.2 FDI and Quick Ratio : The regression analysis run to

assess the impact of FDI on Quick Ratio of FDI-based companies reveal

that FDI significantly influences the Quick ratio in the case of following

companies(see table 7.10a and 7.10b)



• Fulford (India) Ltd. which have an R square value of .420 and


• Merck Ltd. which have an R square value of .627 and beta(t) value



and beta(t) value of 2.959with significance value of .018

• Wyeth Ltd which have an R square value of .413 and beta(t) value


293

Table: 7.10a FDI and Quick Ratio

Model Summary

.347a .121 .011 .698053

.730a .533 .474 .311582

.551a .303 .216 .501445

.129a .017 -.106 .719691

.082a .007 -.192 .426221

.648a .420 .348 .881609

.076a .006 -.118 .328243

.068a .005 -.161 .183239

.372a .139 .031 .486281

.055a .003 -.122 .153396

.792a .627 .581 .635468

.158a .025 -.097 .194698

.452a .204 .105 .507471

.320a .102 -.010 .235040

.723a .523 .463 .215011

.082a .007 -.117 .713901

.339a .115 -.011 .238324

.643a .413 .340 .231735

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




Table: 7.10b

FDI and Quick Ratio

Coefficients a

-2.098 3.662 -.573 .582

.075 .071 .347 1.047 .326

-3.130 1.234 -2.537 .035

.060 .020 .730 3.021 .017

3.423 .916 3.738 .006

-.020 .011 -.551 -1.866 .099

1.402 .358 3.913 .004

-.008 .022 -.129 -.368 .722

.646 .191 3.389 .019

-.001 .004 -.082 -.185 .860

-3.279 1.962 -1.671 .133

.103 .043 .648 2.409 .043

1.621 5.777 .281 .786

-.025 .116 -.076 -.217 .834

.364 .426 .855 .426

.003 .015 .068 .167 .873

.370 .241 1.535 .163

.006 .006 .372 1.135 .289

.514 .066 7.769 .000

.000 .002 -.055 -.155 .881

-155.191 42.770 -3.629 .007

3.072 .837 .792 3.669 .006

1.199 .435 2.756 .025

-.004 .008 -.158 -.453 .663

2.339 .787 2.974 .018

-.025 .018 -.452 -1.434 .190

.737 .083 8.875 .000

-.003 .003 -.320 -.955 .367

1.683 .124 13.560 .000

-.016 .005 -.723 -2.959 .018

1.782 .710 2.511 .036

-.003 .011 -.082 -.233 .822

.984 .117 8.407 .000

-.006 .006 -.339 -.955 .372

-23.935 10.852 -2.206 .058

.506 .213 .643 2.373 .045

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: Quick ratioa.

294

7.3.3 Impact of FDI on Long-term Solvency

7.3.3.1 FDI and Debt-Equity Ratio : The regression analysis

run to assess the impact of FDI on D/E Ratio of FDI-based companies

reveal that FDI significantly influences the D/E ratio in the case of




• Biocon Ltd. which have an R square value of .602 and beta(t) value


• Fresenius Kabi Oncology Ltd. which have an R square value of .582




295

Table: 7.11a

FDI and Debt-Equity Ratio

Model Summary

.191a .036 -.084 .133009

.942a .888 .874 .004369

.157a .025 -.097 .178880

.776a .602 .552 .176431

.763a .582 .498 .140428

.590a .348 .267 .635068

.305a .093 -.020 .028488

.442a .195 .061 3.426238

.325a .106 -.006 1.195475

.580a .336 .253 .403622

.111a .012 -.111 .010000

.115a .013 -.110 .182677

.131a .017 -.106 .013301

.411a .169 .065 .553895

.657a .432 .361 .019579

.072a .005 -.119 .033248

.528a .279 .176 .884033

.509a .259 .167 .002887

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




296

Table: 7.11b

FDI and Debt-Equity Ratio

Coefficients a

.452 .698 .648 .535

-.007 .014 -.191 -.550 .597

.149 .017 8.622 .000

-.002 .000 -.942 -7.954 .000

-.090 .327 -.277 .789

.002 .004 .157 .449 .665

.512 .088 5.828 .000

-.019 .005 -.776 -3.477 .008

.260 .063 4.140 .009

.003 .001 .763 2.639 .046

3.405 1.414 2.409 .043

-.064 .031 -.590 -2.067 .073

-.443 .501 -.883 .403

.009 .010 .305 .907 .391

-6.961 7.974 -.873 .416

.337 .280 .442 1.206 .273

2.177 .592 3.677 .006

.014 .014 .325 .972 .360

.947 .174 5.441 .001

-.008 .004 -.580 -2.012 .079

.216 .673 .321 .757

-.004 .013 -.111 -.316 .760

.211 .408 .516 .620

-.002 .008 -.115 -.328 .751

.012 .021 .560 .591

.000 .000 -.131 -.374 .718

.436 .196 2.228 .057

.009 .007 .411 1.276 .238

.177 .011 15.629 .000

.001 .000 .657 2.467 .039

.005 .033 .139 .893

.000 .001 .072 .205 .843

2.644 .434 6.088 .000

-.039 .024 -.528 -1.646 .144

.237 .135 1.755 .117

-.004 .003 -.509 -1.673 .133

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: Debt equity ratioa.

297

7.3.3.2 FDI and Proprietory Ratio : The regression analysis run

to assess the impact of FDI on Proprietary Ratio of FDI-based companies

reveal that FDI significantly influences the proprietary ratio in the case of









of 2.395with significance value of .044

298

Table: 7.12a

FDI and Proprietary Ratio

Model Summary

.344a .118 .008 .080874

.672a .452 .383 .067547

.545a .297 .209 .112695

.751a .564 .509 .089531

.745a .555 .466 .084300

.675a .455 .387 .179985

.153a .023 -.099 .130928

.318a .101 -.049 .145125

.088a .008 -.116 .096464

.608a .370 .291 .111057

.307a .094 -.019 .061495

.292a .085 -.029 .109424

.293a .086 -.028 .111757

.594a .352 .271 .134796

.286a .082 -.033 .015209

.129a .017 -.106 .076599

.289a .084 -.047 .146548

.646a .418 .345 .042806

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




299

Table: 7.12b

FDI and Proprietary Ratio

Coefficients a

.245 .424 .579 .579

.009 .008 .344 1.036 .330

-.087 .267 -.324 .754

.011 .004 .672 2.566 .033

.977 .206 4.748 .001

-.004 .002 -.545 -1.838 .103

.525 .045 11.788 .000

.009 .003 .751 3.214 .012

.707 .038 18.752 .000

-.002 .001 -.745 -2.499 .055

-.518 .401 -1.292 .232

.023 .009 .675 2.586 .032

1.456 2.304 .632 .545

-.020 .046 -.153 -.436 .674

.574 .338 1.699 .140

-.010 .012 -.318 -.822 .442

.289 .048 6.044 .000

.000 .001 -.088 -.250 .809

.370 .048 7.730 .000

.002 .001 .608 2.168 .062

-3.016 4.139 -.729 .487

.074 .081 .307 .913 .388

.475 .245 1.942 .088

.004 .005 .292 .863 .413

.709 .173 4.090 .003

-.003 .004 -.293 -.868 .411

.540 .048 11.336 .000

-.003 .002 -.594 -2.086 .070

.776 .009 88.407 .000

.000 .000 -.286 -.843 .424

.666 .076 8.746 .000

.000 .001 .129 .367 .723

.315 .072 4.371 .003

.003 .004 .289 .799 .450

5.501 2.005 2.744 .025

-.094 .039 -.646 -2.395 .044

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: ProprietoryRatioa.

300

7.3.4 Impact of FDI on Efficiency

7.3.4.1 FDI and Stock Turnover Ratio: The regression analysis

run to assess the impact of FDI on Stock turnover ratio(STR) of FDI-

based companies reveal that FDI significantly influences the STR in the

case of following companies(see table 7.13a and 7.13b)

• Fresenius Kabi Oncology Ltd. which have an R square value of .711


• Kerala Ayurveda Ltd. which have an R square value of .732 and


• Novartis India Ltd. which have an R square value of .407 and




• Wanbury Ltd. which have an R square value of .774 and beta(t)




301

Table: 7.13a

FDI and Stock Turnover Ratio

Model Summary

.578a .334 .251 1.280026

.089a .008 -.116 3.217827

.225a .051 -.068 3.524746

.121a .015 -.108 1.478036

.843a .711 .654 .783293

.048a .002 -.122 2.063352

.552a .304 .217 .869276

.192a .037 -.124 2.921728

.856a .732 .698 .467504

.450a .202 .103 .779284

.012a .000 -.125 2.153392

.638a .407 .333 1.656697

.010a .000 -.125 .944438

.484a .234 .138 .635869

.458a .210 .111 .438299

.729a .531 .473 1.999365

.880a .774 .742 1.537892

.825a .680 .640 1.043685

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




302

Table: 7.13b

FDI and Stock Turnover Ratio Coefficients a

20.396 6.715 3.037 .016

-.263 .131 -.578 -2.003 .080

6.247 12.740 .490 .637

.052 .203 .089 .254 .806

4.000 6.436 .621 .552

.050 .076 .225 .652 .532

6.046 .736 8.218 .000

.015 .045 .121 .346 .738

4.472 .350 12.765 .000

-.026 .007 -.843 -3.510 .017

5.951 4.593 1.296 .231

.014 .100 .048 .135 .896

-21.717 15.299 -1.420 .194

.572 .306 .552 1.870 .098

10.107 6.800 1.486 .188

-.114 .238 -.192 -.479 .649

3.659 .232 15.803 .000

-.025 .005 -.856 -4.674 .002

4.387 .336 13.052 .000

-.011 .008 -.450 -1.424 .192

13.308 144.933 .092 .929

-.093 2.837 -.012 -.033 .975

.713 3.702 .193 .852

.161 .069 .638 2.344 .047

7.612 1.464 5.200 .001

-.001 .033 -.010 -.030 .977

4.334 .225 19.280 .000

-.012 .008 -.484 -1.563 .157

5.888 .253 23.266 .000

-.016 .011 -.458 -1.459 .183

13.670 1.987 6.878 .000

-.095 .031 -.729 -3.011 .017

4.624 .756 6.120 .000

.203 .041 .880 4.899 .002

-195.301 48.875 -3.996 .004

3.958 .960 .825 4.122 .003

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: Stock Turnover Ratioa.

303

7.3.4.2 FDI and Inventory Ratio: The regression analysis run to

assess the impact of FDI on Inventory Ratio of FDI-based companies

reveal that FDI significantly influences the Inventory ratio in the case of

following companies (see table 7.14a and 7.14b)













FDI significantly influencing the inventory ratio means that there is a

itive relationship between FDI and inventory ratio and increase in level

of FDI will increase the level of inventory.

304

Table: 7.14a

FDI and Inventory Ratio

Model Summary

.222a .049 -.070 .089020

.845a .714 .678 .067727

.174a .030 -.091 .139525

.292a .086 -.029 .062596

.304a .092 -.089 .070863

.916a .839 .819 .081684

.165a .027 -.095 .163372

.093a .009 -.157 .143596

.209a .044 -.076 .060097

.617a .380 .303 .092617

.427a .182 .080 .133202

.394a .155 .049 .056576

.462a .214 .115 .094346

.744a .553 .497 .036878

.649a .421 .349 .033683

.070a .005 -.119 .134355

.890a .793 .763 .045880

.943a .889 .875 .047665

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




305

Table: 7.14b

FDI and Inventory Ratio

Coefficients a

.588 .467 1.260 .243

-.006 .009 -.222 -.644 .538

1.665 .268 6.208 .000

-.019 .004 -.845 -4.467 .002

.368 .255 1.446 .186

-.002 .003 -.174 -.500 .630

.275 .031 8.820 .000

.002 .002 .292 .865 .412

.437 .032 13.786 .000

.000 .001 -.304 -.712 .508

1.554 .182 8.548 .000

-.026 .004 -.916 -6.461 .000

1.558 2.875 .542 .603

-.027 .057 -.165 -.472 .650

.243 .334 .728 .494

.003 .012 .093 .229 .826

.494 .030 16.604 .000

.000 .001 .209 .603 .563

.510 .040 12.764 .000

-.002 .001 -.617 -2.216 .058

12.264 8.965 1.368 .208

-.234 .176 -.427 -1.336 .218

.431 .126 3.406 .009

-.003 .002 -.394 -1.212 .260

.398 .146 2.724 .026

-.005 .003 -.462 -1.474 .179

.360 .013 27.594 .000

-.001 .000 -.744 -3.148 .014

.219 .019 11.256 .000

.002 .001 .649 2.412 .042

.329 .134 2.465 .039

.000 .002 .070 .200 .847

.321 .023 14.236 .000

-.006 .001 -.890 -5.178 .001

18.064 2.232 8.093 .000

-.350 .044 -.943 -7.985 .000

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: Inventory Ratioa.

306

7.3.4.3 FDI and Assets Turnover Ratio : The regression analysis

run to assess the impact of FDI on Assets Turnover Ratio (ATR) of FDI-

based companies reveal that FDI significantly influences the assets

turnover ratio in the case of following companies(see table 7.15a and

7.15b)





• Kerala Ayurveda Ltd. which have an R square value of .917 and












307

Table: 7.15a

FDI and Assets turnover Ratio

Model Summary

.565a .319 .234 .211652

.399a .159 .054 .124753

.259a .067 -.049 .241065

.776a .603 .553 .112274

.519a .270 .124 .201553

.944a .890 .876 .316384

.204a .042 -.078 .418562

.385a .148 .006 .208408

.958a .917 .907 .045294

.725a .526 .466 .297921

.293a .086 -.028 .379561

.557a .310 .224 .154909

.512a .262 .169 .434213

.643a .413 .340 .220238

.646a .417 .345 .100610

.901a .812 .788 .362158

.193a .037 -.100 .109176

.853a .728 .693 .111259

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




308

Table: 7.15b

FDI and Assets turnover Ratio

Coefficientsa

3.396 1.110 3.059 .016

-.042 .022 -.565 -1.938 .089

1.062 .494 2.149 .064

.010 .008 .399 1.232 .253

.924 .440 2.098 .069

.004 .005 .259 .760 .469

.842 .056 15.062 .000

-.012 .003 -.776 -3.485 .008

.639 .090 7.095 .001

-.003 .002 -.519 -1.359 .232

7.684 .704 10.911 .000

-.124 .015 -.944 -8.054 .000

5.113 7.366 .694 .507

-.087 .147 -.204 -.589 .572

.152 .485 .313 .765

.017 .017 .385 1.021 .347

.640 .022 28.546 .000

-.005 .001 -.958 -9.418 .000

1.174 .128 9.136 .000

-.009 .003 -.725 -2.978 .018

23.342 25.546 .914 .388

-.434 .500 -.293 -.868 .411

1.800 .346 5.198 .001

-.012 .006 -.557 -1.897 .094

2.163 .673 3.214 .012

-.025 .015 -.512 -1.684 .131

.779 .078 10.009 .000

-.006 .003 -.643 -2.375 .045

.727 .058 12.509 .000

-.006 .003 -.646 -2.394 .044

3.974 .360 11.040 .000

-.033 .006 -.901 -5.876 .000

.628 .054 11.711 .000

-.002 .003 -.193 -.521 .618

25.114 5.210 4.820 .001

-.473 .102 -.853 -4.622 .002

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: Assets Turnover Ratioa.

309

7.3.5 Impact of FDI on Expenses

7.3.5.1 FDI and R& D Expenses Ratio: The regression analysis

run to assess the impact of FDI on R & D Expenses Ratio of FDI-based

companies reveal that FDI significantly influences the R&D Expenses in

the case of following companies(see table 7.16a and 7.16b)



• Aventis Pharma Ltd. which have an R square value of .825 and








310

Table: 7.16a

FDI R& D Expenses Ratio

Model Summary

.908a .825 .803 .001227

.286a .082 -.033 .001633

.947a .898 .885 .005186

.553a .306 .219 .013790

.096a .009 -.189 .014493

.402a .161 .057 .001213

.086a .007 -.117 .002180

.694a .482 .417 .043329

.347a .120 .010 .001535

.492a .242 .147 .000945

.064a .004 -.120 .003589

.141a .020 -.103 .050328

.720a .518 .449 .030327

.905a .819 .797 .000564

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Fresenius KabiOncology Ltd.GlaxosmithklinePharmaceuticals Ltd.Kerala Ayurveda Ltd.


Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.

Ranbaxy LaboratoriesLtd.Wanbury Ltd.

Wyeth Ltd.




311

Table: 7.16b

FDI and R& D Expenses Ratio

Coefficientsa

-.034 .006 -5.275 .001

.001 .000 .908 6.133 .000

-.001 .006 -.079 .939

8.73E-005 .000 .286 .845 .422

.095 .009 10.057 .000

-.001 .000 -.947 -8.372 .000

.042 .007 6.135 .000

.001 .000 .553 1.877 .097

.099 .006 15.240 .000

-2.9E-005 .000 -.096 -.215 .838

-.023 .021 -1.063 .319

.001 .000 .402 1.241 .250

.007 .001 6.259 .000

-6.2E-006 .000 -.086 -.243 .814

.036 .019 1.942 .088

.001 .000 .694 2.728 .026

-.106 .103 -1.021 .337

.002 .002 .347 1.046 .326

.005 .002 2.370 .045

-6.3E-005 .000 -.492 -1.599 .149

.032 .006 5.734 .000

2.25E-005 .000 .064 .180 .861

.096 .018 5.420 .001

.000 .001 .141 .402 .698

-.003 .015 -.219 .833

.002 .001 .720 2.744 .029

.162 .026 6.115 .000

-.003 .001 -.905 -6.021 .000

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.





Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: R&D Expenses Ratioa.

312

7.3.6 Impact of FDI on Growth

7.3.6.1 FDI and growth in Forex Earnings : The regression

analysis run to assess the impact of FDI on growth of Forex earnings of

FDI-based companies reveal that FDI significantly influences the growth

of Forex earnings in the case of following companies(see table 7.17a and

7.17b)



• Glaxosmithkline Pharmaceuticals Ltd. which have an R square

value of .720 and beta(t) value of 4.242 with significance value of

.004

• Merck Ltd. which have an R square value of .467 and beta(t) value


313

Table: 7.17a

FDI and growth in Forex Earnings

Model Summary

.004a .000 -.143 28.232363

.618a .382 .294 33.542441

.195a .038 -.100 1641.362586

.874a .763 .729 33.816566

.357a .127 -.091 31.515072

.221a .049 -.087 118.570907

.848a .720 .680 14.073270

.485a .235 .126 45.147586

.171a .029 -.109 116.652611

.362a .131 .007 928.815728

.683a .467 .391 25.969816

.241a .058 -.077 34.596983

.038a .001 -.141 75.162609

.208a .043 -.093 30.115143

.169a .028 -.110 41.187724

.510a .260 .154 344.142526

.260a .068 -.065 232.078742

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.

Ranbaxy LaboratoriesLtd.Solvay Pharma India Ltd.

Wanbury Ltd.

Wyeth Ltd.




314

Table: 7.17b

FDI and growth in Forex Earnings

Coefficients a

22.770 149.406 .152 .883

-.033 2.909 -.004 -.011 .991

-422.567 208.458 -2.027 .082

6.798 3.269 .618 2.080 .076

-1766.453 4473.962 -.395 .705

26.890 51.254 .195 .525 .616

123.907 19.407 6.384 .000

-5.308 1.117 -.874 -4.751 .002

24.388 15.758 1.548 .197

.232 .303 .357 .764 .487

-162.277 277.640 -.584 .577

3.593 5.995 .221 .599 .568

-1120.248 266.159 -4.209 .004

22.628 5.334 .848 4.242 .004

-98.515 41.357 -2.382 .049

2.181 1.486 .485 1.467 .186

-9.824 65.535 -.150 .885

.671 1.461 .171 .459 .660

677.749 444.015 1.526 .171

-9.954 9.677 -.362 -1.029 .338

-4339.711 1759.085 -2.467 .043

85.282 34.431 .683 2.477 .042

49.407 78.251 .631 .548

-.944 1.440 -.241 -.656 .533

27.653 118.760 .233 .823

-.268 2.641 -.038 -.102 .922

22.184 11.382 1.949 .092

-.213 .378 -.208 -.564 .591

-175.280 375.404 -.467 .655

2.546 5.627 .169 .452 .665

402.088 193.343 2.080 .076

-15.563 9.928 -.510 -1.568 .161

-8912.764 12641.892 -.705 .504

176.934 248.103 .260 .713 .499

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.



Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: Forex earningsa.

315

7.3.6.2 FDI and growth in Sales : The regression analysis run

to assess the impact of FDI on growth in Sales of FDI-based companies

reveal that FDI significantly influences the growth in sales in the case of


• Aventis Pharma Ltd. which have an R square value of .495 and




Table: 7.18a

FDI and growth in Sales

Model Summary

.703a .495 .423 3.733913

.642a .412 .328 4.807305

.606a .367 .277 16.484834

.774a .600 .543 21.173022

.594a .353 .191 22.448300

.053a .003 -.140 19.585594

.397a .158 .037 7.132757

.519a .269 .165 39.086882

.472a .223 .112 17.254379

.403a .162 .043 90.541436

.396a .157 .036 10.291345

.181a .033 -.106 5.223196

.038a .001 -.141 25.271464

.001a .000 -.143 22.268618

.107a .012 -.130 8.304500

.065a .004 -.138 4.225791

.615a .378 .289 32.051873

.088a .008 -.134 9.930414

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




316

Table: 7.18b

FDI and growth in Sales

Coefficients a

58.996 19.760 2.986 .020

-1.007 .385 -.703 -2.618 .034

-57.401 29.876 -1.921 .096

1.038 .468 .642 2.216 .062

-72.836 44.934 -1.621 .149

1.037 .515 .606 2.015 .084

63.657 12.151 5.239 .001

-2.266 .700 -.774 -3.239 .014

4.952 11.224 .441 .682

.319 .216 .594 1.476 .214

-.571 45.861 -.012 .990

.139 .990 .053 .140 .892

163.004 134.897 1.208 .266

-3.095 2.704 -.397 -1.145 .290

-89.240 35.805 -2.492 .041

2.067 1.287 .519 1.606 .152

-2.985 9.693 -.308 .767

.306 .216 .472 1.418 .199

95.061 43.283 2.196 .064

-1.099 .943 -.403 -1.165 .282

-788.942 697.092 -1.132 .295

15.552 13.645 .396 1.140 .292

-1.292 11.814 -.109 .916

.106 .217 .181 .486 .642

15.599 39.930 .391 .708

-.089 .888 -.038 -.100 .923

12.840 8.417 1.526 .171

.001 .279 .001 .003 .998

12.579 4.795 2.624 .034

.062 .217 .107 .285 .784

21.092 38.516 .548 .601

-.100 .577 -.065 -.173 .868

69.392 18.007 3.854 .006

-1.906 .925 -.615 -2.062 .078

131.007 540.934 .242 .816

-2.475 10.616 -.088 -.233 .822

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: Salesa.

317

7.3.6.3 FDI and Growth in Total Exports: The regression analysis

run to assess the impact of FDI on growth in Export of FDI-based companies

reveal that FDI significantly influences the the growth in total exports in the case

of following companies(see table 7.19a and 7.19b)

• Astrazeneca Pharma India Ltd. which have an R square value of .515 and


• Biocon Ltd. which have an R square value of .764 and beta(t) value of


• Glaxosmithkline Pharmaceuticals Ltd. which have an R square value of


Table: 7.19a

FDI and growth in total exports

Model Summary

.110a .012 -.129 27.736832

.330a .109 -.018 25.200584

.717a .515 .445 51.381476

.874a .764 .730 33.842369

.399a .159 -.051 34.461517

.176a .031 -.107 117.793408

.841a .707 .665 14.486119

.485a .235 .126 45.147586

.167a .028 -.111 116.966967

.361a .131 .006 927.931204

.640a .410 .326 27.467333

.270a .073 -.060 43.508185

.043a .002 -.141 18.785109

.262a .069 -.064 29.212292

.140a .020 -.121 42.772024

.514a .264 .159 349.220292

.260a .068 -.066 221.940590

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.

Ranbaxy LaboratoriesLtd.Solvay Pharma India Ltd.

Wanbury Ltd.

Wyeth Ltd.




318

Table: 7.19b

FDI and growth in total exports

Coefficients a

61.354 146.783 .418 .688

-.835 2.858 -.110 -.292 .779

-138.294 156.615 -.883 .407

2.275 2.456 .330 .926 .385

-343.959 140.054 -2.456 .044

4.370 1.604 .717 2.724 .030

123.904 19.422 6.379 .000

-5.324 1.118 -.874 -4.761 .002

22.979 17.231 1.334 .253

.289 .332 .399 .871 .433

-121.132 275.819 -.439 .674

2.821 5.956 .176 .474 .650

-1116.590 273.967 -4.076 .005

22.556 5.491 .841 4.108 .005

-98.515 41.357 -2.382 .049

2.181 1.486 .485 1.467 .186

-9.720 65.711 -.148 .887

.659 1.465 .167 .449 .667

676.307 443.592 1.525 .171

-9.915 9.668 -.361 -1.025 .339

-4087.105 1860.521 -2.197 .064

80.337 36.417 .640 2.206 .063

70.117 98.406 .713 .499

-1.342 1.810 -.270 -.741 .483

4.720 29.681 .159 .878

.076 .660 .043 .115 .912

22.039 11.041 1.996 .086

-.264 .366 -.262 -.719 .495

-150.240 389.844 -.385 .711

2.182 5.844 .140 .373 .720

397.380 196.196 2.025 .082

-15.978 10.074 -.514 -1.586 .157

-8515.910 12089.642 -.704 .504

169.047 237.264 .260 .712 .499

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.



Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: Total Exporta.

319

7.3.6.4 FDI and growth in Profit before Interest & Tax (PBIT): The

regression analysis run to assess the impact of FDI on growth in PBIT of

FDI-based companies reveal that FDI significantly influences the the

growth in PBIT in the case of following companies(see table 7.20a and

7.20b)



Table: 7.20a

FDI and growth in PBIT

Model Summary

.303a .092 -.038 36.855663

.190a .036 -.102 24.494018

.576a .332 .236 62.480545

.293a .086 -.045 84.914089

.767a .589 .486 153.647460

.233a .054 -.081 137.875606

.564a .318 .221 29.206309

.069a .005 -.137 1163.715710

.260a .068 -.065 374.202682

.532a .283 .180 438.156585

.061a .004 -.139 30.050757

.095a .009 -.132 29.016471

.414a .171 .053 70.839763

.880a .774 .741 68.465733

.295a .087 -.043 14.046637

.262a .069 -.064 55.638407

.044a .002 -.141 113.034289

.227a .051 -.084 45.940080

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




320

Table: 7.20a

FDI and growth in PBIT

Coefficients a

187.223 195.040 .960 .369

-3.197 3.798 -.303 -.842 .428

-71.742 152.224 -.471 .652

1.220 2.387 .190 .511 .625

-279.732 170.307 -1.643 .144

3.638 1.951 .576 1.864 .105

84.481 48.733 1.734 .127

-2.274 2.806 -.293 -.811 .444

109.503 76.824 1.425 .227

-3.537 1.478 -.767 -2.392 .075

-230.943 322.843 -.715 .498

4.427 6.971 .233 .635 .546

1025.854 552.360 1.857 .106

-20.017 11.070 -.564 -1.808 .114

509.564 1065.998 .478 .647

-7.021 38.307 -.069 -.183 .860

-77.767 210.224 -.370 .722

3.344 4.688 .260 .713 .499

350.294 209.458 1.672 .138

-7.580 4.565 -.532 -1.660 .141

337.397 2035.511 .166 .873

-6.414 39.842 -.061 -.161 .877

28.532 65.629 .435 .677

-.306 1.207 -.095 -.253 .807

165.551 111.930 1.479 .183

-2.991 2.489 -.414 -1.202 .269

41.712 25.878 1.612 .151

-4.203 .859 -.880 -4.893 .002

-1.070 8.110 -.132 .899

.301 .367 .295 .818 .440

390.230 507.115 .770 .467

-5.457 7.602 -.262 -.718 .496

1.168 63.504 .018 .986

.379 3.261 .044 .116 .911

-1525.309 2502.468 -.610 .561

30.276 49.112 .227 .616 .557

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: PBITa.

321

7.3.6.5 FDI and growth in Profit after Tax (PAT): The

regression analysis run to assess the impact of FDI on growth in Profit

after Tax (PAT) of FDI-based companies reveal that FDI significantly

influences the the growth in PAT in the case of following companies(see




Table: 7.21a

FDI and growth in PAT

Model Summary

.269a .072 -.060 43.545575

.227a .052 -.084 28.304767

.526a .277 .173 85.434820

.297a .088 -.042 104.905287

.672a .451 .314 204.133003

.272a .074 -.058 246.797916

.500a .250 .143 44.661857

.018a .000 -.142 104.718449

.125a .016 -.125 1591.933029

.513a .263 .158 517.290676

.080a .006 -.136 42.433275

.062a .004 -.139 44.256285

.391a .153 .032 84.495082

.883a .780 .749 61.685091

.276a .076 -.056 27.290511

.315a .100 -.029 65.968513

.515a .265 .160 584.828561

.224a .050 -.085 47.947251

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




322

Table: 7.21b

FDI and growth in PAT

Coefficients a

195.031 230.443 .846 .425

-3.319 4.487 -.269 -.740 .484

-104.110 175.907 -.592 .573

1.702 2.758 .227 .617 .557

-331.987 232.875 -1.426 .197

4.367 2.668 .526 1.637 .146

103.788 60.206 1.724 .128

-2.857 3.466 -.297 -.824 .437

142.762 102.067 1.399 .234

-3.560 1.964 -.672 -1.812 .144

-493.353 577.890 -.854 .422

9.349 12.478 .272 .749 .478

1321.626 844.661 1.565 .162

-25.841 16.929 -.500 -1.526 .171

-38.374 95.925 -.400 .701

-.162 3.447 -.018 -.047 .964

-305.365 894.336 -.341 .743

-6.646 19.942 -.125 -.333 .749

402.191 247.288 1.626 .148

-8.522 5.390 -.513 -1.581 .158

620.380 2874.250 .216 .835

-11.901 56.259 -.080 -.212 .838

34.842 100.098 .348 .738

-.301 1.842 -.062 -.163 .875

186.624 133.506 1.398 .205

-3.338 2.968 -.391 -1.124 .298

34.714 23.315 1.489 .180

-3.860 .774 -.883 -4.987 .002

-2.859 15.756 -.181 .861

.543 .714 .276 .761 .471

559.704 601.268 .931 .383

-7.928 9.013 -.315 -.880 .408

689.866 328.563 2.100 .074

-26.828 16.871 -.515 -1.590 .156

-1570.882 2611.803 -.601 .566

31.217 51.258 .224 .609 .562

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: PATa.

323

7.3.6.6 FDI and Growth in Assets :

The regression analysis run to assess the impact of FDI on growth in

assets of FDI-based companies reveal that FDI significantly influences

the the growth in assets in the case of following companies ( see table

7.22a and 7.22b)

• Fresenius Kabi Oncology Ltd. which have an R square value of


Table: 7.22a

FDI and growth in Assets

Model Summary

.069a .005 -.137 6.683209

.164a .027 -.112 5.992948

.124a .015 -.125 31.147461

.630a .397 .311 42.339026

.867a .752 .690 9.299536

.544a .296 .196 33.844202

.638a .407 .323 19.453205

.486a .236 .127 41.103793

.630a .397 .311 22.290697

.483a .233 .123 106.751387

.603a .363 .272 6.186855

.240a .058 -.077 9.287695

.201a .040 -.097 33.095264

.108a .012 -.130 19.265254

.494a .244 .137 2.274937

.582a .338 .244 16.549563

.349a .122 -.004 62.919325

.556a .309 .211 7.453413

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.






Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.


Wanbury Ltd.

Wyeth Ltd.




324

Table: 7.22b

FDI and growth in Assets

Coefficients a

20.857 35.368 .590 .574

-.127 .689 -.069 -.184 .859

-9.062 37.245 -.243 .815

.257 .584 .164 .440 .673

-12.904 84.901 -.152 .883

.321 .973 .124 .331 .751

85.308 24.299 3.511 .010

-3.005 1.399 -.630 -2.148 .069

35.539 4.650 7.643 .002

-.311 .089 -.867 -3.480 .025

-113.224 79.248 -1.429 .196

2.938 1.711 .544 1.717 .130

833.638 367.906 2.266 .058

-16.178 7.374 -.638 -2.194 .064

-75.859 37.652 -2.015 .084

1.990 1.353 .486 1.471 .185

-5.374 12.523 -.429 .681

.600 .279 .630 2.148 .069

131.185 51.032 2.571 .037

-1.622 1.112 -.483 -1.458 .188

850.809 419.071 2.030 .082

-16.395 8.203 -.603 -1.999 .086

-5.247 21.007 -.250 .810

.253 .386 .240 .655 .534

58.484 52.292 1.118 .300

-.630 1.163 -.201 -.542 .605

19.376 7.282 2.661 .032

.069 .242 .108 .286 .783

8.081 1.313 6.152 .000

-.090 .060 -.494 -1.505 .176

314.040 150.840 2.082 .076

-4.277 2.261 -.582 -1.892 .100

73.808 35.349 2.088 .075

-1.786 1.815 -.349 -.984 .358

726.442 406.005 1.789 .117

-14.106 7.968 -.556 -1.770 .120

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

(Constant)

FDI(%)

Model1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1


Abbott India Ltd.


Biocon Ltd.




K D L Biotech Ltd.



Merck Ltd.

Novartis India Ltd.

Pfizer Ltd.




Wanbury Ltd.

Wyeth Ltd.

B Std. Error


Beta


t Sig.

Dependent Variable: Assetsa.

325

7.4 IMPACT OF FDI (FOREIGN PROMOTER QUOTA) ON THE

FINANCIAL PERFORMANCE OF SELECTED FDI-BASED

PHARMACEUTICAL COMPANIES – AN ANALYSIS BASED ON

AGGREGATE PARAMETERS.

In this case, FDI (% of foreign promoter in the Share holding pattern

of the company) is considered as independent variable and financial

ratios measured as dependent variables(see table 7.23a and 7.23b).

The analysis reveals that FDI significantly influences the following

ratios

• RONW with an R square value of .410 and beta(t) value of 2.357


• Inventory Ratio with an R square value of .686 and beta(t) value of


• Assets turnover ratio with an R square value of .703 and beta(t)


326

Table: 7.23a

FDI and Indian Pharmaceutical Sector Model Summary

Dependent Variable Model R R Square

Adjusted R Square


Net Profit Margin 1 .018a .000 -.125 3.5756048

ROTA 1 .537a .289 .200 2.0962784

RONW 1 640a .410 .336 5.2186109

ROCE 1 .617a .380 .303 3.5344929

Current Ratio 1 .381a .145 .038 .1148430

Quick Ratio 1 .443a .196 .095 .1252576

D/E Ratio 1 .217a .047 -.072 .2308832

Proprietary Ratio 1 .107a .011 -.112 .0409346

Stock Turnover Ratio 1 .217a .047 -.072 .5337671

Inventory Ratio 1 .828a .686 .647 .0401548

Assets Turnover Ratio 1 .838a .703 .666 .1347429

R&D Expenses ratio 1 .568a .323 .238 .0076878

Growth in FOREX Earnings 1 .239a .057 -.077 154.1656185

Growth in Sales 1 .205a .042 -.095 11.3656430

Growth in exports 1 .374a .140 .017 54.2928683

Growth in PBIT 1 .104a .011 -.130 59.2718418

Growth in PAT 1 .198a .039 -.098 103.4643411

Growth in Assets 1 .452a .205 .091 9.9992581

327

Table: 7.23b

FDI and Indian Pharmaceutical Sector Coefficients

Dependent Variable Model Unstandardized Coefficients Standardized

Coefficients t Sig. B Std. Error Beta

Net Profit Margin

1 (Constant) 18.105 13.754 1.316 .225

FDI -.015 .298 -.018 -.050 .961

ROTA 1 (Constant) 26.145 8.064 3.242 .012

FDI -.315 .175 -.537 -1.803 .109

RONW 1 (Constant) 63.899 20.074 3.183 .013

FDI -1.025 .435 -.640 -2.357 .046

ROCE

1 (Constant) 47.225 13.596 3.473 .008

FDI -.653 .296 -.617 -2.216 .058

Current Ratio

1 (Constant) 1.437 .442 3.254 .012

FDI .011 .010 .381 1.164 .278

Quick Ratio 1 (Constant) .438 .482 .908 .390

FDI .015 .010 .443 1.396 .200

D/E Ratio 1 (Constant) -.022 .888 -.025 .981

FDI .012 .019 .217 .630 .546

Proprietary Ratio

1 (Constant) .616 .157 3.912 .004

FDI -.001 .003 -.107 -.305 .768

Stock Turnover Ratio

1 (Constant) 5.334 2.053 2.598 .032

FDI .028 .044 .217 .628 .547

Inventory Ratio

1 (Constant) .965 .154 6.244 .000

FDI -.014 .003 -.828 -4.181 .003

Assets Turnover Ratio

1 (Constant) 3.298 .518 6.364 .000

FDI -.049 .011 -.838 -4.350 .002

R&D Expenses ratio

1 (Constant) -.035 .030 -1.186 .270

FDI .001 .001 .568 1.953 .087

Growth in Forex Earnings

1 (Constant) 535.581 707.034 .758 .473

FDI -9.852 15.113 -.239 -.652 .535

Growth in Sales

1 (Constant) 41.882 52.125 .803 .448

FDI -.617 1.114 -.205 -.554 .597

Growth in exports 1 (Constant) 308.463 248.998 1.239 .255

FDI -5.682 5.322 -.374 -1.067 .321

Growth in PBIT

1 (Constant) -36.574 271.832 -.135 .897

FDI 1.1613 5.810 .104 .278 .789

Growth in PAT 1 (Constant) 256.581 474.508 .541 .605

FDI -5.420 10.143 -.198 -.534 .610

Growth in Assets 1 (Constant) 82.849 45.859 1.807 .114

FDI -1.315 .980 -.452 -1.342 .222

328

TEST OF HYPOTHESES

Based upon the analysis carried out, the following hypotheses are

accepted/rejected. The explanation for which is given below

S.No Hypotheses Result

1. H01: There is no significant impact of FDI on the profitability

of select pharmaceutical firms in India Rejected

2. H02: There is no significant impact of FDI on the liquidity of

select pharmaceutical firms in India Accepted

3. H03: There is no significant impact of FDI on the solvency of

select pharmaceutical firms in India Accepted

4. H04: There is no significant impact of FDI on the efficiency of

select pharmaceutical firms in India Rejected

5. H05: There is no significant impact of FDI on the R & D

expenses of select pharmaceutical firms in India Accepted

6. H06: There is no significant impact of FDI on the growth in

exports of select pharmaceutical firms in India Accepted

7. H07: There is no significant impact of FDI on the sales of

select pharmaceutical firms in India Rejected

8. H08: There is no significant impact of FDI on the capital

employed of select pharmaceutical firms in India Rejected

SUMMARY RESULT OF TEST OF HYPOTHESES

FDI significantly influences Profitability as measured through (Return

on Net Worth ) of Select Pharmaceutical firms in India (Refer table 7.23a

and 7.23b).

FDI does not significantly influences the Liquidity of Select

329

Pharmaceutical firms in India (Refer table 7.23a and 7.23b).

FDI does not significantly influences the solvency of Select


FDI significantly influences the efficiency as measured through

(Assets turnover ratio) of Select Pharmaceutical firms in India (Refer

table 7.23a and 7.23b).

FDI does not significantly influences the R & D expenses of Select


FDI significantly influences sales of Select Pharmaceutical firms in

India (Refer table: 7.4a and 7.4b).

FDI significantly influences capital employed of Select Pharmaceutical

firms in India (Refer table: 7.4a and 7.4b).

However, it can be depicted that FDI inflows have an impact on the

growth of Select Pharmaceutical firms in India measured through

profitability, efficiency, sales and capital employed.

Documents

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