Analysis on the Effect of Chinese Medical Reform Policy on Medical Listed Companies -- Empirical Analysis on Listed Companies¡¯ Stocks Returns

This paper studies the stock market reaction of medical reform policies to examine policies¡¯ effect on the listed companies which invested in hospital. This paper applies the method of Event Study, finding out that the announcement of the new round of medical and health systemic reform in 2009, the key work for medical and health systemic reform and its detailed rules of implementation in 2010, and the setting of several specific goals to develop the private hospitals run by civilians in 2012, have taken increases of listed companies¡¯ stocks returns (rate of return) by 2.95%, 4.64% and 4.92% separately. That means the whole market value rose by almost 55 billion, 128 billion, and 131 billion of RMB respectively. The empirical analysis results show that share price¡¯s return rate of the listed companies which invested in hospital are significantly associated with industrial planning and supporting policies launched by the government. That is to say, Chinese government¡¯s policy which began to encourage and guide civilian capital to develop the medical industry stimulated the medical and health industry effectively and significantly.