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Stock market behavior of pharmaceutical industry in Iran and macroeconomic factors

Author

Listed:
  • Hassan Heidari

    (Urmia University)

  • Arash Refah Kahriz

    (Urmia University)

  • Yousef Mohammadzadeh

    (Urmia University)

Abstract

This paper is the first attempt to evaluate the behavior of Iran’s pharmaceutical industry in light of challenges and variations. The pharmaceutical industry can be examined from two dimensions, namely, supply and demand. With respect to the demand side, the aging population, growing urbanization, and people’s changing preferences have been identified as the major issues shaping this demand in Iran in recent years. Regarding the supply as the main focus of this paper, we examine the effect of the most important macroeconomic variables such as inflation rate of health care, oil price shocks and money growth in the pharmaceutical industry. We investigate the influencing factors through impulse response analysis and variance decomposition analysis by collecting monthly data from 2005:1 to 2016:3. The results of this study demonstrate that pharmaceutical price has increased recently, and widespread changes have occurred in the Iranian’s pharmaceutical industry. Moreover, our findings indicate that the money growth and inflation rate of health care are the most influential factors in the pharmaceutical industry in Iran, during the period of study.

Suggested Citation

  • Hassan Heidari & Arash Refah Kahriz & Yousef Mohammadzadeh, 2019. "Stock market behavior of pharmaceutical industry in Iran and macroeconomic factors," Economic Change and Restructuring, Springer, vol. 52(3), pages 255-277, August.
    • Handle: RePEc:kap:ecopln:v:52:y:2019:i:3:d:10.1007_s10644-018-9228-7
    DOI: 10.1007/s10644-018-9228-7
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    Cited by:

    1. Hada Izabela Diana, 2020. "Evolutions and Trends Regarding the Pharmaceutical Sector in Romania," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 59-65.
    2. Chiwei Su & Yiru Liu & Chang Liu & Ran Tao, 2022. "The Impact of Medical and Health Fiscal Expenditures on Pharmaceutical Industry Stock Index in China," IJERPH, MDPI, vol. 19(18), pages 1-14, September.
    3. Saadati, Alireza & Honarmandi, Zahra & Zarei, Samira, 2020. "Real Exchange Rate Shocks and Export-Oriented Businesses in Iran: An Empirical Analysis Using NARDL Model," MPRA Paper 101554, University Library of Munich, Germany, revised 30 Jun 2020.

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    More about this item

    Keywords

    Health care; Macroeconomic factors; Pharmaceutical industry; Vector autoregressive model;
    All these keywords.

    JEL classification:

    • G40 - Financial Economics - - Behavioral Finance - - - General
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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