Data from Saint Peter’s University Provide New Insights into Risk Management (Exploring Corporate Capital Structure and Overleveraging in the Pharmaceutical Industry): Insurance – Risk Management

2025 MAR 11 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- New research on risk management is the subject of a new report. According to news reporting out of Jersey City, New Jersey, by NewsRx editors, research stated, “This paper applies an empirical model of corporate capital structure, optimal debt, and overleveraging to estimate overleveraging measured as the difference between actual and optimal debt.”

The news correspondents obtained a quote from the research from Saint Peter’s University: “Estimated using a sample of the twenty largest pharmaceutical firms, covering the time span from 2000 to 2018, the model sheds light on an industry-specific default risk. The analysis presented in this paper reveals a concerning trend in the pharmaceutical industry, with corporate excess debt steadily increasing over the past two decades, particularly peaking during the 2008 crisis and after 2013. These findings underscore the critical role of excess debt in exacerbating financial instability and highlight the pharmaceutical sector’s unique challenges, including high R&D intensity and regulatory pressures.”

According to the news reporters, the research concluded: “By quantifying overleveraging and linking it to financial risk, the paper offers valuable policy implications, emphasizing the need for proactive management of optimal debt levels to mitigate default risks and enhance macroeconomic resilience.”

For more information on this research see: Exploring Corporate Capital Structure and Overleveraging in the Pharmaceutical Industry. Risks, 2025,13(2):26. (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks13020026.

Our news editors report that more information may be obtained by contacting Samar Issa, Department of Business Administration, Saint Peter’s University, Jersey City, NJ 07306, United States. Additional authors for this research include Hussein Issa.

(Our reports deliver fact-based news of research and discoveries from around the world.)