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Military regimes and stock market performance

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  • Civilize, Sireethorn
  • Wongchoti, Udomsak
  • Young, Martin

Abstract

We examine whether military regimes harm stock market performance by investigating stock returns in ten emerging markets under military and civilian rule. We find no evidence of military regimes having a significantly negative impact on stock returns. In the case of Thailand and Pakistan, we find a significant positive military return premium. These returns cannot be explained by economic cycles, stock market cycles, or returns volatility. Our findings are robust to worldwide stock market movements, tests for spurious regression bias and randomization-bootstrap tests. Our results contradict the common view that military rule has a negative impact on stock market performance.

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  • Civilize, Sireethorn & Wongchoti, Udomsak & Young, Martin, 2015. "Military regimes and stock market performance," Emerging Markets Review, Elsevier, vol. 22(C), pages 76-95.
    • Handle: RePEc:eee:ememar:v:22:y:2015:i:c:p:76-95
    DOI: 10.1016/j.ememar.2015.01.001
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    4. Jale Tosun & Aurel Croissant, 2016. "Policy Diffusion: A Regime-sensitive Conceptual Framework," Global Policy, London School of Economics and Political Science, vol. 7(4), pages 534-540, November.
    5. Thanakorn Suriyapongprapai & Pattanaporn Chatjuthamard & Arnat Leemakdej & Sirimon Treepongkaruna, 2022. "Stakeholder engagement, military ties, and firm performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(2), pages 469-479, March.
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    More about this item

    Keywords

    Military regimes; Stock returns; Emerging markets;
    All these keywords.

    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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