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How leadership turnover influences global financial markets

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  • Bonaparte, Yosef
  • Mikhailitchenko, Andrey
  • Fabozzi, Frank J.

Abstract

The study examines how political regime turnover affects stock market performance. It hypothesizes that turnover rate influences political system quality and government governance, particularly political stability and effectiveness. Results show leadership turnover impacts global stock markets nonlinearly, with a peak effect occurring between 5.1 and 8.4 years, suggesting regimes should last at least 5 and, at most, 8 years. The research underscores the relationship between leadership changes and economic outcomes, emphasizing balanced political tenure to support stock market stability and reduce policy uncertainty.

Suggested Citation

  • Bonaparte, Yosef & Mikhailitchenko, Andrey & Fabozzi, Frank J., 2025. "How leadership turnover influences global financial markets," Finance Research Letters, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:finlet:v:78:y:2025:i:c:s1544612325002442
    DOI: 10.1016/j.frl.2025.106980
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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