A Study On The Stock Price Effect Of Food And Drug Safety Event Of Listed Company

Food and drug safety is not only related to the health and safety of consumers, but also related to the prosperity and social enterprise, market stability, and play a decisive role in the entire social life. However, in recent years, food and drug safety incidents frequently occurred. It has knocked consumer confidence and caused the turbulent society. In this paper, on the basis of the description and analysis of the listing Corporation in food and drug safety incidents, the stock price effect and the potential factors of stock price effect have been detailed discussed, and further to investigated the industry effect that those events caused by building investment elasticity model.Firstly, research about listing corporation emergencies were briefly reviewed in this paper, and points out the deficiencies in the study of food and drug safety incidents. Secondly, analyze the related theories about food and drug safety incidents, demonstrates the stock price effect and industry effect exists in food and drug safety events from the perspective of qualitative. Then, analyze the factors that may affect the stock price effect on food and drug safety incidents by using one-way ANOVA of parameters test method, and supplement the results by Mann-Whitney U test of non-parametric test method. Finally, from a angle of in depth study of the industry effects caused by the food and drug safety events by constructing the investment elasticity model.The results show that, food and drug safety incidents have a negative and significant stock price effect. This may cause stock price sharply fallen in the short time, which severely damage the listing Corporation market value and shareholder wealth; At the same time, the nature of the company, the event characteristics and the market environment factors have a significant impact on the stock price effect. In addition, “poison capsule” incident has be chosen as a research object of industry effects. The research found that the event has remarkable industry contagion effect, which means the companies do not have problem products also suffering from the events, and stock prices have a significant decline.