FDA approval announcements: Attention-grabbing or event-day misspecification?

Philip A. Hamill, Mark Hutchinson, Quang Minh Nhi Nguyen and Mark Mulcahy

Economics Letters, 2018, vol. 170, issue C, 171-174

Abstract: The attention-grabbing hypothesis has been offered as a behavioural explanation for post-event abnormal returns for FDA drug approval announcements for NYSE listed firms. We show that when event-day mis-specification is accounted for, the market reaction is centred on the event-day and that the increase in firm value is driven by after-market-close approval announcements.

Keywords: Research and Development; FDA; Attention-grabbing; Pharmaceuticals; Event study (search for similar items in EconPapers)
JEL-codes: G14 G18 L11 O31 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:170:y:2018:i:c:p:171-174

DOI: 10.1016/j.econlet.2018.06.024

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