THE COVID-19 PANDEMIC AND INDIAN PHARMACEUTICAL COMPANIES: AN EVENT STUDY ANALYSIS
Abstract
Although there is a plethora of studies which examine the impact of the COVID-19 pandemic on India’s financial sector, we contribute by investigating the effect of the ongoing COVID-19 pandemic on stock returns of Indian pharmaceutical companies. By employing an event study methodology, our results indicate that the average returns of the pharmaceutical sector are positive during the COVID-19 phase although
mixed evidence is found at the firm level. This finding is also robust to alternative model specifications.
Downloads
References
Agarwalla, S. K., Jacob, J., & Varma, J. R. (2013). Four Factor Model in Indian Equities Market. (Working Paper W.P. No. 2013-09-05). Indian Institute of Management, Ahmedabad.
Athreye, S., & Godley, A. (2009). Internationalization and Technological Leapfrogging in the Pharmaceutical Industry. Industrial and Corporate Change, 18, 295-323.
Dev, S. M., & Sengupta, R. (2020). Covid-19: Impact on the Indian Economy (Indira Gandhi Institute of Development Research Working Paper, No.2020-013). Indira Gandhi Institute of Development.
Devpura, N. (2020). Can Oil Prices Predict Japanese Yen? Asian Economics Letters, 1(3). https://doi.org/10.46557/001c.17964
Devpura, N., & Narayan, P.K. (2020) Hourly Oil Price Volatility: The Role of COVID-19. Energy Research Letters, 1, 13683. https://doi.org/10.46557/001c.13683
Donadelli, M., Kizys, R., & Riedel, M. (2017). Dangerous Infectious Diseases: Bad News for Main Street, Good News for Wall Street? Journal of Financial Markets, 35, 84-103.
Fama, Eugene F., & French. Kenneth R. (1993). Common Risk Factors in the Returns on Stocks and Bonds. Journal of Financial Economics, 33, 1, 3–56.
Gu, X., Ying, S., Zhang, W., & Tao, Y. (2020). How do Firms Respond to COVID-19? First Evidence from Suzhou, China. Emerging Markets Finance and Trade, 56, 2181-2197.
He, P., Sun, Y., Zhang, Y., & Li, T. (2020). COVID-19’s Impact on Stock Prices Across Different Sectors—An Event Study Based on the Chinese Stock Market. Emerging Markets Finance and Trade, 56, 2198-2212. https://doi.org/10.1080/1540496X.2020.1785865.
He, P., Niu, H., Sun, Z., & Li, T. (2020) Accounting Index of COVID-19 Impact on Chinese Industries: A Case Study Using Big Data Portrait Analysis. Emerging Markets Finance and Trade, 56, 2332-2349. https://doi.org/10.1080/1540496X.2020.1785866
Iyke, N. B. (2020). Economic Policy Uncertainty in Times of COVID-19 Pandemic. Asian Economics Letters, 1. https://doi.org/10.46557/001c.17665
Kale, D. (2019). From Small Molecule Generics to Biosimilars: Technological Upgrading and Patterns of Distinctive Learning Processes in the Indian Pharmaceutical Industry. Technological Forecasting and Social Change, 145, 370-383.
Kale, D., & Little, S. (2007). From Imitation to Innovation: The Evolution of R&D Capabilities and Learning Processes in the Indian Pharmaceutical Industry. Technology Analysis & Strategic Management, 19, 589-609.
Kritzman, M. P. (1994). What Practitioners Need to Know About Event Studies. Financial Analysts Journal, 50, 17-20.
Mishra, A.K., Rath, B.N., & Dash, A.K. (2020) Does the Indian Financial Market Nosedive Because of the COVID-19 Outbreak, in Comparison to After Demonetisation and the GST? Emerging Markets Finance and Trade, 56, 2162-
Narayan, P. K. (2020a). Oil price news and COVID-19—Is There Any Connection? Energy Research Letters, 1, 13176. https://doi.org/10.46557/001c.13176
Narayan, P. K. (2020b). Did Bubble Activity Intensify During COVID-19? Asian Economics Letters, 1(2). https://doi.org/10.46557/001c.17654
Narayan, P. K. (2020c). Has COVID-19 Changed Exchange Rate Resistance to Shocks? Asian Economics Letters, 1. https://doi.org/10.46557/001c.17389
Narayan, P. K., Phan, D. H. B., & Bannigidadmath, D. (2017). Is the Profitability of Indian Stocks Compensation for Risks? Emerging Markets Review, 31, 47-64.
Narayan, P. K., Ranjeeni, K., & Bannigidadmath, D. (2017). New Evidence of Psychological Barrier from the Oil Market. Journal of Behavioral Finance, 18,457-469.
Phan, D.H.B., & Narayan, P.K. (2020) Country responses and the reaction of the stock market to COVID-19—a Preliminary Exposition. Emerging Markets Finance and Trade; 56(10), 2138-2150. https://doi.org/10.1080/1540496X.2020.1784719
Prabheesh, K.P. (2020). Dynamics of Foreign Portfolio Investment and Stock Market Returns During the COVID-19 Pandemic: Evidence from India. Asian Economics Letters, 1. https://doi.org/10.46557/ 001c.17658.
Ramelli, S., & Wagner, A. F. (2020). Feverish Stock Price Reactions to COVID-19 (CEPR Discussion Papers, 14511). C.E.P.R.
Rath, B.N., & Akram, V. (2020). Does COVID‐19 Outbreak Cause Spot Electricity Price Discovery in India? Journal of Public Affairs. https://doi.org/10.1002/pa.2439.
Seungho, B., Mohanty, S.K., & Glambosky, M. (2020). COVID-19 and Stock Market Volatility: An Industry Level Analysis. Finance Research Letters, 37, 101748.
Sha, Y., & Sharma, S.S. (2020) Research on Pandemics Special Issue of the Journal Emerging Markets Finance and Trade, 56, 2133-2137; https://doi.org/10.1080/1540496X.2020.1795467
Sharma, C. (2012). R&D and Productivity in the Indian Pharmaceutical Firms. Journal of the Asia Pacific Economy, 17, 332-342.
Sharma, S. S. (2020). A Note on the Asian Market Volatility During the COVID-19 Pandemic. Asian Economics Letters, 1. https://doi.org/10.46557/001c.17661
Sharma, S.S., & Sha, Y. (2020) Part A: Special Section on COVID-19 Research. Emerging Markets Finance and Trade, 56, 3551-3553. https://doi.org/10.1080/1540496X.2020.1858617
Shen, H., Fu, M., Pan, H., Yu, Z., & Chen, Y. (2020). The Impact of the COVID-19 Pandemic on Firm Performance. Emerging Markets Finance and Trade, 56, 2213-2230.
Yan, C. (2020). COVID-19 Outbreak and Stock Prices: Evidence from China. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3574374.
Copyright (c) 2021 Buletin Ekonomi Moneter dan Perbankan
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Buletin Ekonomi Moneter dan Perbankan / Bulletin of Monetary Economics and Banking is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
