FDA approval announcements: Attention-grabbing or Event-day misspecification?

6 Pages Posted: 26 Apr 2021

See all articles by Philip A. Hamill

Philip A. Hamill

Emirates Institute for Banking and Financial Studies

Mark C. Hutchinson

University College Cork

Quang Minh Nhi Nguyen

The University of Danang - University of Economics - the University of Danang

Mark B. Mulcahy

University College Cork - College of Business and Law

Date Written: May 30, 2018

Abstract

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

Hamill, Philip A. and Hutchinson, Mark C. and Nguyen, Quang Minh Nhi and Mulcahy, Mark B., FDA approval announcements: Attention-grabbing or Event-day misspecification? (May 30, 2018). Economics Letters, Vol. 170, 2018, Available at SSRN: https://ssrn.com/abstract=3827043

Philip A. Hamill

Emirates Institute for Banking and Financial Studies ( email )

PO Box 341400
Dubai
United Arab Emirates

Mark C. Hutchinson

University College Cork ( email )

O'Rahilly Building
College Road
Cork
Ireland

Quang Minh Nhi Nguyen (Contact Author)

The University of Danang - University of Economics - the University of Danang ( email )

71 Ngu Hanh Son Street
Danang
Vietnam

Mark B. Mulcahy

University College Cork - College of Business and Law ( email )

ORB 3.09
Western Road
Cork
Ireland

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