EconPapers    
Economics at your fingertips  
 

An investor's perspective on infectious diseases and their influence on market behavior

Yi-Hsien Wang, Fu-Ju Yang and Li-Je Chen

Journal of Business Economics and Management, 2013, vol. 14, issue sup1, S112-S127

Abstract: Recently, increasing number of infectious diseases has swept the world. The outbreak of a contagious disease not only affects the health and lives of people but also causes economic growth to stagnate. Business in the biotechnology industry is closely related to infectious diseases but what exactly is the information value of the outbreak of infectious disease on biotechnology? This study investigates how such outbreaks can affect the performance of biotechnology stocks. In the past 10 years, major statutory infectious diseases in Taiwan have included ENTEROVIRUS 71, DENGUE FEVER, SARS and H1N1. The empirical results indicate that there is a significant abnormal return on company shares in Taiwan's biotechnology industry because of statutory infectious epidemics. The relationship between the financial ratios of biotechnology companies and abnormal returns was analyzed as part of this research. The results show that the influence on R&D ratios, current ratios and assets are significant. Empirical findings reveal that the investors rationally measure operating conditions of the biotechnology companies during outbreaks of major infectious disease and adjust portfolio allocation accordingly.

Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
http://hdl.handle.net/10.3846/16111699.2012.711360 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jbemgt:v:14:y:2013:i:sup1:p:s112-s127

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TBEM20

DOI: 10.3846/16111699.2012.711360

Access Statistics for this article

Journal of Business Economics and Management is currently edited by Izolda Joksiene, Romualdas Ginevicius and Ieva Meidute

More articles in Journal of Business Economics and Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2025-03-20
Handle: RePEc:taf:jbemgt:v:14:y:2013:i:sup1:p:s112-s127