Journal Article

Regulatory Events and Biotech Firm Share Prices

Erik Dohlman, Thomas Hall and Agapi Somwaru

in Applied Economic Perspectives and Policy

Published on behalf of Agricultural and Applied Economics Association

Volume 24, issue 1, pages 108-122
Published in print January 2002 | ISSN: 2040-5790
Published online January 2002 | e-ISSN: 2040-5804 | DOI: https://dx.doi.org/10.1111/1058-7195.00008
Regulatory Events and Biotech Firm Share Prices

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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.

Keywords: G140; L650; M310; Q130; Q160; Q180

Journal Article.  0 words. 

Subjects: Manufacturing ; Marketing ; Economics ; Agricultural Economics

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