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Concentrated Announcements on Clustered Data: An Event Study on Biotechnology Stocks

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  • Véronique Bastin
  • Georges Hübner

Abstract

In spring 2000, three events—two political statements by Bill Clinton and Tony Blair and a breakthrough announcement by Celera Genomics—had a major impact on biotechnology stocks. We analyze their effects over a comprehensive set of biopharmaceutical companies, using a composite return‐generating model with an industry‐specific patent‐based factor. Our results show that stocks can be clustered according to their responsiveness to political and scientific events. Furthermore, we emphasize different impacts on the market value of intangible assets for each cluster, suggesting that growth options are valued with different criteria for therapeutics, and technology‐based subsectors.

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  • Véronique Bastin & Georges Hübner, 2006. "Concentrated Announcements on Clustered Data: An Event Study on Biotechnology Stocks," Financial Management, Financial Management Association International, vol. 35(1), pages 129-157, March.
    • Handle: RePEc:bla:finmgt:v:35:y:2006:i:1:p:129-157
    DOI: 10.1111/j.1755-053X.2006.tb00134.x
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    Cited by:

    1. Lazonick, William & Tulum, Öner, 2011. "US biopharmaceutical finance and the sustainability of the biotech business model," Research Policy, Elsevier, vol. 40(9), pages 1170-1187.
    2. Shu Lin & Shu Tian & Eliza Wu, 2013. "Emerging Stars and Developed Neighbors: The Effects of Development Imbalance and Political Shocks on Mutual Fund Investments in China," Financial Management, Financial Management Association International, vol. 42(2), pages 339-371, June.

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