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While the stock market crashed in the first quarter after the outbreak of COVID-19, this paper finds that bio-tech firms and their investors could take advantage of the COVID-19 investment opportunity and earn positive abnormal returns. Bio-tech firms earn abnormal return of 1.63% per day around the event day when WHO declared COVID-19 as a global emergency, which could be translated into average capital gain about 86.7 million NT dollars per day. Positive returns continue after the event day. Moreover, small firms, firms with greater patent originality and receiving government R&D subsidies earn higher abnormal returns.
JEL Classification: G12; G14.
Keywords: COVID-19; Novel Coronavirus Diseases; Stock Returns; Bio-Tech Firms.