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Political uncertainty and stock performance: Evidence from sessions of the Chinese Provincial People’s Congress

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  • Yu, Wei
  • Zheng, Ying
  • Jia, Jianjun

Abstract

This study examines stock behavior around sessions of the Chinese Provincial People’s Congress (PPC). We find that listed companies undergo a decrease in stock returns and an increase in return volatility around PPC sessions that introduce changes in government policies, regardless of whether they involve gubernatorial elections. We find some evidences the beneficial government policies have positive effects on stock performance during the PPC periods using the real estate industry sample. Firms have higher stock returns and lower stock volatility during PPC sessions that have less political uncertainty. The effects of the PPC sessions are more prominent during the first year of the five-year plans and less prominent for state-owned listed firms, firms with PPC deputy Chairman or CEOs, or firms in regulated industries.

Suggested Citation

  • Yu, Wei & Zheng, Ying & Jia, Jianjun, 2025. "Political uncertainty and stock performance: Evidence from sessions of the Chinese Provincial People’s Congress," Research in International Business and Finance, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:riibaf:v:75:y:2025:i:c:s0275531924005191
    DOI: 10.1016/j.ribaf.2024.102726
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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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