FDA approval announcements: Attention-grabbing or Event-day misspecification?
6 Pages Posted: 26 Apr 2021
Date Written: May 30, 2018
The attention-grabbing hypothesis has been offered as a behavioural explanation for post-event abnormal returns for FDA drug approval announcements for NYSE listed firms. We show that when event-day mis-specification is accounted for the market reaction is centred on the event-day and that the increase in firm value is driven by after-market-close approval announcements.
Keywords: Research and Development, FDA Attention-Grabbing, Pharmaceuticals, Event Study
JEL Classification: O31, G14, G18, L11
Suggested Citation: Suggested Citation