IDEAS home Printed from https://ideas.repec.org/a/ids/amerfa/v5y2018i3p293-321.html
   My bibliography  Save this article

Political uncertainty and market reaction: the case of Tunisian democratic transition

Author

Listed:
  • Linda Fakhfakh
  • Taher Hamza
  • Siwar Ellouz

Abstract

Political risk is an important factor that affects stock market reaction. Our paper investigates the impact of Tunisian democratic transition on both stock market and bank sector returns. We use the event study and BHAR methodologies and test the relation between political risk and stock returns in the short and long-term horizon. Our results show that: 1) In the short-term, the political risk associated with the 'revolution' event, affects negatively the stock market returns. This impact is positive in the long-term. 2) The '2014 elections' event positively affects stock market returns in the short-term and negatively over 18 months. 3) For the '2011 elections' event, the short-term positive effect seems to persist for long-term. 4) Lastly, in the context of democratic transition, political risk affects negatively the bank sector returns. This study proposes several managerial implications for investors as well as for market regulators.

Suggested Citation

  • Linda Fakhfakh & Taher Hamza & Siwar Ellouz, 2018. "Political uncertainty and market reaction: the case of Tunisian democratic transition," American Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 5(3), pages 293-321.
    • Handle: RePEc:ids:amerfa:v:5:y:2018:i:3:p:293-321
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=93046
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:amerfa:v:5:y:2018:i:3:p:293-321. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=229 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.