Analysis of the Impact of the Epidemic on the Technology-related Industry by Fama-French Five-factors Model

Abstract

Before and during the epidemic, all major industries were hit and affected to a certain extent. In this paper, the Fama-French five-factor model is used as the basic model. The data from the French database and the method of linear regression are adopted to analyze the impact on the technology industry. Three industries, chip, software, and hardware, are adopted as the research objects. In the analysis of factor changes, it is found that the model is suitable for the analysis of the technology market, and there is no abnormal existence. The sensitivity of the technology industry as a whole to the changes in supply and demand caused by the epidemic is increasing significantly. As for the market, investors preferred to invest in companies with strong profitability. The technology market is subdivided into hardware and software sectors. The epidemic situation has a certain inhibitory effect on the hardware industry, while it gives a certain development space to the software industry. According to the structural bull market of Nasdaq, the software industry is more in favor of investing in high market capitalization companies. For the technology industry as a whole, the shifts in investors and market preferences have not been significant.

Comparison Between Different Pricing Models: Evidence from the Technology Industry

“…When the proportion of production and research costs in revenue is high, profitability has a significant impact. However, in industries with a more decentralized market, profitability is relatively less taken into consideration [9].…”