THE TYLENOL INCIDENT, ENSUING REGULATION, AND STOCK-PRICES

被引:46
作者
DOWDELL, TD
GOVINDARAJ, S
JAIN, PC
机构
[1] NYU,LEONARD N STERN SCH BUSINESS,NEW YORK,NY 10003
[2] TULANE UNIV,AB FREEMAN SCH BUSINESS,NEW ORLEANS,LA 70118
关键词
D O I
10.2307/2331372
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
The much publicized Tylenol incident in 1982 led to stringent packaging regulations for over-the-counter pharmaceutical drugs. The sudden incident and the swift progression of associated events offer a unique opportunity to assess the wealth effects of the resultant regulations. The market value of common stock of Johnson & Johnson, makers of Tylenol, declined by approximately 29 percent, amounting to $2.31 billion. Although other firms in the industry also suffered significantly, their share price decline did not occur around the Tylenol incident but occurred around the subsequent packaging regulation proceedings. On average, 28 other pharmaceutical firms analyzed in this study experienced a decline of $310 million per firm, or a total of about $8.68 billion. The results suggest that the regulation had a significant negative effect on the common stock prices of firms in the pharmaceutical industry.
引用
收藏
页码:283 / 301
页数:19
相关论文
共 13 条
[1]   INTRA-INDUSTRY EFFECTS OF THE ACCIDENT AT THREE-MILE-ISLAND [J].
BOWEN, RM ;
CASTANIAS, RP ;
DALEY, LA .
JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS, 1983, 18 (01) :87-111
[2]   MEASURING SECURITY PRICE PERFORMANCE [J].
BROWN, SJ ;
WARNER, JB .
JOURNAL OF FINANCIAL ECONOMICS, 1980, 8 (03) :205-258
[3]  
BROWNING M, 1985, SECUR REGUL LAW J, V13, P3
[4]   A COMPARISON OF ALTERNATIVE TESTING METHODOLOGIES USED IN CAPITAL-MARKET RESEARCH [J].
COLLINS, DW ;
DENT, WT .
JOURNAL OF ACCOUNTING RESEARCH, 1984, 22 (01) :48-84
[5]  
COMANOR WS, 1986, J ECON LIT, V24, P1178
[6]   AN ANALYSIS OF THE IMPACT OF DEPOSIT RATE CEILINGS ON THE MARKET VALUES OF THRIFT INSTITUTIONS [J].
DANN, LY ;
JAMES, CM .
JOURNAL OF FINANCE, 1982, 37 (05) :1259-1275
[7]  
FAMA EF, 1976, F FINANCE
[8]  
HILL J, 1983, J FINANC, V47, P1285
[9]  
JAIN P, 1985, J FINANC, V49, P209
[10]   THE IMPACT OF PRODUCT RECALLS ON THE WEALTH OF SELLERS [J].
JARRELL, G ;
PELTZMAN, S .
JOURNAL OF POLITICAL ECONOMY, 1985, 93 (03) :512-536