News Influence on Stock Price Dynamics: the Case of Pharmaceutical Industry

Student: Shishkova Sofiya

Educational Programme: Economics (Bachelor)

Year of Graduation: 2020

The aim of this study is to determine how generic drug approvals influence American and Indian pharmaceutical stocks in the remodeling conditions. The relationship between news and stock returns was explored handling the event-study methodology. 782 events were amassed for the 2012-2019 period and analysed in the study. The research identified the results: first generic drug approvals negatively influence American innovator stock returns at the announcement day; the event effect is significantly positive in the case of the Indian generic manufacturers during the days after the announcement day; the abnormal return of the American generic manufacturers is insignificant; the intensity of the event influence does not depend on the company capitalisation and the share of the drug sales in the company revenue.

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