Inderscience Publishers

Long–term value creation in the pharmaceutical sector: an event study analysis of big pharma stocks

0
- By: ,

Courtesy of Inderscience Publishers

We investigate the drivers of value creation in big pharmaceutical firms. We use a unique dataset of a total of 2,200 news items on research and development (R&D) progress announcements and dividend news of 25 largest pharmaceutical companies for the period 1998–2010. Our findings affirm the role of successful R&D as a driver of value creation in the long–run. This long term view of value creation has implications for sustainability. R&D is a critical input to long–term sustainable growth and the pharmaceutical sector is one of the highest R&D–intense sectors. Furthermore, successful R&D leading to the discovery of new drugs enhances the prospects for a sustainable economy by improving the society's health status and well–being. Indeed, we find that negative R&D news destroys more long–term value than the value created by positive news. This highlights the concern for the overall long–term adverse implications of unsuccessful R&D on the economy.

Keywords: research and development, R&, D progress announcements, dividend news, pharmaceutical industry, stock markets, sustainable value creation, event study, sustainable development, dividends, sustainable economy, drug discovery, long–term value

Customer comments

No comments were found for Long–term value creation in the pharmaceutical sector: an event study analysis of big pharma stocks. Be the first to comment!