Regulatory Events and Biotech Firm Share Prices

Posted: 5 May 2003

See all articles by Erik Dohlman

Erik Dohlman

U.S. Department of Agriculture (USDA) – Economic Research Service (ERS)

Thomas W. Hall

Christopher Newport University

Agapi Somwaru

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Abstract

Using the 'event study' method, we measure the impact on agricultural biotechnology firm equity values of new regulations and other limitations placed on the marketing of biotech crops. Unanticipated declines to biotech firm stock prices indicate that newly imposed regulatory restrictions appear most likely to diminish profit expectations for these firms. The stock price reaction to decisions by crop handlers, processors, or retailers to segregate or limit the use of biotech crops and to reports questioning their safety are less pronounced. Incentives to engage in new biotech crop research and development may be diminished by these developments.

Suggested Citation

Dohlman, Erik and Hall, Thomas William and Somwaru, Agapi, Regulatory Events and Biotech Firm Share Prices. Available at SSRN: https://ssrn.com/abstract=313714

Erik Dohlman (Contact Author)

U.S. Department of Agriculture (USDA) – Economic Research Service (ERS) ( email )

1800 M Street, NW
Washington, DC 20036-5831
United States

Thomas William Hall

Christopher Newport University ( email )

United States

Agapi Somwaru

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
202-219-0690 (Phone)
202-219-0641 (Fax)

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