University of Twente Student Theses
R&D investments and stock return volatility : A study on the biotechnological and pharmaceutical industry in Europe.
Cuba, Ruwigène de (2023) R&D investments and stock return volatility : A study on the biotechnological and pharmaceutical industry in Europe.
|
PDF
5MB |
| Abstract: | This study investigates the relationship between R&D investment intensity and stock return volatility in the European pharmaceutical and biotechnological industry. Using panel data, the analysis explores the impact of R&D investments on both total stock return volatility and idiosyncratic volatility. The sample comprises 206 publicly listed pharmaceutical and biotechnological firms from 2015 to 2021, with a specific focus on R&D investments related to COVID-19 during the years 2020 and 2021. The results demonstrate no significant relationship between R&D investment intensity and idiosyncratic risk. In contrast, a negative association is observed between R&D investment intensity and total stock return volatility. However, it is noted that firms with higher R&D investment intensity experienced increased volatility in their total stock returns specifically during the COVID-19 pandemic. The results of this study suggest that pharmaceutical and biotechnological firms can potentially decrease the level of volatility in their stock returns by investing in R&D activities. |
| Item Type: | Essay (Master) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 83 economics |
| Programme: | Business Administration MSc (60644) |
| Link to this item: | https://purl.utwente.nl/essays/95158 |
| Export this item as: | BibTeX EndNote HTML Citation Reference Manager |
Show download statistics for this publication
Show download statistics for this publicationRepository Staff Only: item control page