R&D Stages and Stock Price Reactions in the Japanese Market
University of Tokyo - Faculty of Engineering
University of Tokyo - Department of Technology Management for Innovation
September 29, 2009
This paper investigates how stock markets react to the release of R&D-related news by studying stock price data for firms listed on the first section of the Tokyo Stock Exchange between 2000 and 2006. If information uncertainty is the major cause of the post-announcement drift, post-announcement drift should decrease with R&D progress. Our results show that late-stage R&D announcements increase stock prices. The post-announcement drift tends to decrease with R&D progress for late-stage R&D news. For pharmaceutical industry, the negative association between drift and R&D progress is obtained for most R&D stages.
Number of Pages in PDF File: 26
Keywords: R&D statagies, Stock Price Reactions
JEL Classification: G14, M41, O32, O33working papers series
Date posted: October 23, 2010
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