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Does microtherm boost pharmaceutical companies’ market capitalization returns?

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  • Yu-Sheng Kao
  • Hao-Yang Sun
  • Chien-Chung Nieh
  • Kai Zhao

Abstract

The purpose of this study was to survey the relationship between the temperature factors and market capitalization returns of pharmaceutical companies by analysing both the daily and weekly frequency data in Taiwan. The threshold regression model with the GJR-GARCH process was applied for examination in this study; we found that pharmaceutical companies’ market capitalization returns could be boosted after exposure to extremely low temperatures for a period of time. Besides, the delayed effect of cold weather is demonstrated to exist. This phenomenon can be illustrated by epidemiological evidence-related mental factors, not by traditional behavioural finance. Moreover, lower weekly average temperatures are beneficial for investors to gain weekly pharmaceutical companies’ market capitalization returns. We are of the opinion that our findings offer an insightful suggestion for investors to buy pharmaceutical stocks at an opportune moment.

Suggested Citation

  • Yu-Sheng Kao & Hao-Yang Sun & Chien-Chung Nieh & Kai Zhao, 2018. "Does microtherm boost pharmaceutical companies’ market capitalization returns?," Applied Economics, Taylor & Francis Journals, vol. 50(14), pages 1522-1535, March.
    • Handle: RePEc:taf:applec:v:50:y:2018:i:14:p:1522-1535
    DOI: 10.1080/00036846.2017.1368988
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    Cited by:

    1. Kao, Yu-Sheng & Zhao, Kai & Chuang, Hwei-Lin & Ku, Yu-Cheng, 2024. "The asymmetric relationships between the Bitcoin futures’ return, volatility, and trading volume," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 524-542.

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