Interest Group Activity and Long-Run Stock Market Performance
This paper provides evidence that interest group activity is negatively related to aggregate stock market performance. In particular, the ¯ndings imply that a one percent increase in the number of interest groups in a country is associated with a reduction in average annual stock market returns of roughly 2-5%, and a reduction in the volatility of annual stock returns of roughly 6-14%. In addition, the ¯ndings indicate that many of the same fundamentals that drive economic growth also explain stock market performance.
|Date of creation:||Apr 2007|
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