Impact of Firm Characteristics on Pharmaceutical Stock Prices: Evidence from Vietnam

Abstract

This study examines the influence of micro- and macro-financial factors on the stock prices of listed pharmaceutical companies in Vietnam from 2019 to 2024. Drawing on foundational theories and prior empirical research, a linear regression model is developed and estimated using the Bayesian approach with the MCMC algorithm, enabling the posterior distribution to be used in evaluating the reliability of explanatory variables. The findings reveal that earnings per share (EPS) is the only variable whose 95% posterior credible interval excludes zero and whose posterior probability approaches 1, confirming its consistent and robust impact on stock prices. In contrast, variables such as ROE, ROA, SIZE, P/E, P/B, GDP, and inflation (INF) do not present sufficiently strong probabilistic evidence. These results suggest that investors in Vietnam’s pharmaceutical sector prioritize EPS over other conventional financial indicators. The study contributes new empirical insights into market behavior in the pharmaceutical industry and offers implications for investors in stock selection as well as policymakers in capital market development.