The Impact of Second Generation National Health Insurance on Stock Prices- based upon Supplementary Premium Charges on Dividend Income

The purpose of this study is to explore the influences of second generation National Health Insurance (NHI) on the stock prices of listed companies in Taiwan. We employed the Event Study methodology to analyze the impact on listed companies’ stock prices during the period of NHI Act amendment. Moreover, with a seemingly unrelated regression model, we discovered whether or not the new National Health Insurance system exerts different influences on different industries. The main results are as follows. First, the second generation NHI affects the stock prices of listed companies during the NHI act revision period. Secondly, the second generation NHI has different influences on industries. One possible reason is that the second generation NHI’s charges of supplementary premium on dividend income makes investors feel pessimistic about this new insurance policy. This issue alters investment decisions and has a negative influence on Building Material and Construction Industry.