A-share Stock Reactions to the Approval of COVID-19 Vaccine Clinical Trial: An Event Study Model of Listed Pharmaceutical Firms’ Returns

摘要

There is a growing body of literature that conducts empirical analysis based on COVID-19 pandemic. This paper is to investigate the influences of approval of clinical trial of COVID-2019 vaccine developed by China National Biotec Group on pharmaceutical enterprises' return in the A-share market. Daily stock returns of 218 pharmaceutical firms were selected to conduct the study with the market model of event study. The announcement of the world's first inactivated COVID-2019 vaccine clinical trial is found to have a positive impact on the stock market where the maximum abnormal return as well as cumulative abnormal return both reaches the top on the 2 days after the event day. It indicates that shareholders reacted to the event rapidly and actively. The findings confirm that during the pandemic, people are sensitive to the news about R&D of vaccine, mapping to the strong actions to the stock exchanges. This serves governments and investors as a proof to respond to the economic market more effectively.