Graduation Year

2025

Date of Submission

12-2024

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Murat Binay

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

@2024 Isabel Carter

Abstract

In order to stay competitive in an expansionary industry like healthcare, companies must consistently meet market demands for growth. This paper builds an empirical model to identify which growth strategies are most highly rewarded by the public markets. The model consists of a data set of 70 healthcare companies, across various healthcare verticals, to measure market returns from 2010 to 2023. The number of completed acquisitions is used as a proxy to identify each company’s propensity towards a growth strategy. Factors from the Fama-French Model and dummy variables used to signal growth strategy expertise, indicate that firms who invest more heavily in R&D strategies tend to be more heavily rewarded by the public markets. Furthermore, results from the Fama-French Model suggest that the companies observed in the model are defensive, growth-oriented, and benefit from momentum. As for specific crises, such as the global coronavirus pandemic in 2020, the results suggest an even stronger market appreciation for healthcare companies that focus on internal innovation.

Carter_Isabel_Final_FallThesis2024aligned.pdf (594 kB)
Content is the same but paragraph formats are justified to the right

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