We examine whether investor mood, driven by World Health Organization (WHO) alerts and media news on dangerous infectious diseases, is priced in pharmaceutical companies' stocks in the United States. We argue that disease-related news (DRNs) should not trigger rational trading. We find that DRNs have a positive and significant sentiment effect among investors (on Wall Street). The effect is stronger (weaker) for small (large) companies, who are less (more) likely to engage in the development of new vaccines. A potential negative investor climate (on Main Street) – induced by disease-related fear – does not alter the positive sentiment effect.

Dangerous Infectious Diseases: Bad news for Main Street, Good News for Wall Street?

Donadelli, M.;Riedel, M.
2017-01-01

Abstract

We examine whether investor mood, driven by World Health Organization (WHO) alerts and media news on dangerous infectious diseases, is priced in pharmaceutical companies' stocks in the United States. We argue that disease-related news (DRNs) should not trigger rational trading. We find that DRNs have a positive and significant sentiment effect among investors (on Wall Street). The effect is stronger (weaker) for small (large) companies, who are less (more) likely to engage in the development of new vaccines. A potential negative investor climate (on Main Street) – induced by disease-related fear – does not alter the positive sentiment effect.
File in questo prodotto:
File Dimensione Formato  
2017_XX_JFM_Dangerous Infectious Diseases Bad news for Main Street-good news for Wall.pdf

accesso aperto

Tipologia: Documento in Post-print
Licenza: Accesso gratuito (solo visione)
Dimensione 1.16 MB
Formato Adobe PDF
1.16 MB Adobe PDF Visualizza/Apri

I documenti in ARCA sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10278/3703224
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 100
  • ???jsp.display-item.citation.isi??? 93
social impact