Impact of Financial Disruption on Firms’ Performance (An Event Study)

Mohammad Yameen, Najib H.S. Farhan

Abstract


This study aims to estimate the effect of financial disruption on the performance of pharmaceutical companies listed on Bombay Stock Exchange. The total number of listed pharmaceutical companies on Bombay Stock Exchange is 153 companies, 32 companies were excluded due to non-availability of the quarterly financial reports. Three variables have been taken for exploring the impact of financial disruption on the firms’ performance which are: net sales, net profit and earning per share.  Data were extracted from interim quarterly financial reports retrieved from the Prowess Q database. Two steps of analysis have been conducted using EViews. First, comparing firm’s performance pre disruption period second quarter (September, 2016) with firm’s performance post disruption period third quarter (December, 2016). Second, comparing the firms’ performance post disruption, third quarter (December, 2016) with the same quarter (December, 2015). Descriptive statistics and paired sample T-test were applied to evaluate the effect of the financial disruption on firms’ performance. The findings reveal that the financial disruption has no statistically significant impact on the performance of the pharmaceutical companies at level of 5%.

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