Political orientation of government and stock market returns
AbstractPrior research documented that U.S. stock prices tend to grow faster during Democratic administrations than during Republican administrations. This letter examines whether stock returns in other countries also depend on the political orientation of the incumbents. An analysis of 24 stock markets and 173 different governments reveals that there are no statistically significant differences in returns between left-wing and right-wing executives. Consequently, international investment strategies based on the political orientation of countries' leadership are likely to be futile.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 307.
Date of creation: Jul 2006
Date of revision: Nov 2006
Stock market returns; Politics; Presidential puzzle;
Other versions of this item:
- Jedrzej Bialkowski & Katrin Gottschalk & Tomasz Piotr Wisniewski, 2007. "Political orientation of government and stock market returns," Applied Financial Economics Letters, Taylor and Francis Journals, vol. 3(4), pages 269-273.
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-12 (All new papers)
- NEP-CDM-2006-11-12 (Collective Decision-Making)
- NEP-CFN-2006-11-12 (Corporate Finance)
- NEP-PBE-2006-11-12 (Public Economics)
- NEP-POL-2006-11-12 (Positive Political Economics)
- NEP-RMG-2006-11-12 (Risk Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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