Ashok Kumar Sar; Kshirod Kumar Panigrahi
Abstract
Purpose: This article made an effort to evaluate the effect of the pandemic on the healthcare ecosystem. It aimed to analyse the performance of the pharmaceutical industry, hospitals, ...
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Purpose: This article made an effort to evaluate the effect of the pandemic on the healthcare ecosystem. It aimed to analyse the performance of the pharmaceutical industry, hospitals, and firms engaged in diagnostic and laboratory activities. Design and Methodology: The performance of the healthcare firms has been assessed by studying the stock price movement of these firms using event study methodology. The market model and the Fama & French three-factor model have been used to estimate the normal or expected return. The abnormal return which is computed by deducting the expected return from the actual returns across the event period helped the researcher evaluate the performance of the healthcare industry during the pandemic. The daily returns data from 1st June 2019 to 13th April 2020 of 22 firms listed on the Indian stock exchange has been used for the study. The standard t-test (parametric) and the Kollari & Pynonnen generalized rank (GRANK) test (non-parametric) have been used for testing hypothesis.Results: Results showed that the cumulative average abnormal return (CAAR) for all 22 firms grouped together was positive and statistically significant. The CAAR for Nifty Pharma and BSE Healthcare was also positive and statistically significant. The result confirms that the pandemic had a positive impact on the Indian healthcare industry. This article helped researchers and investors appraise the performance of healthcare industry during pandemic.
