American presidential elections and returns of defence industry stocks

US elections and monthly stock market returns

“…Here, empirical results line up far more closely with the popular wisdom: the stock market, on average, reacts more positively to the election of a Republican president than to the election of a Democrat. Studies whose results are largely consistent with this hypothesis include Homaifar et al (1988), Siegel (2002), Riley and Luksetich (1980), and Niederhoffer et al (1970).…”

Measurement of Political Effects in the United States Economy: A Study of the 1992 Presidential Election

“…Hence, it is not remarkable that studies which examine the political sensitivity of a sector across elections (e.g. Homaifar et al, 1988) ®nd only weak evidence that presidential party impacts asset prices.…”

“…IT IS often claimed that United States presidential election outcomes aect various sectors of the US economy. For example, one common assertion is that the American defense sector tends to bene®t from Republican control of the White House (e.g., Homaifar et al, 1988). Using security price data, this paper presents an empirical methodology designed to pinpoint those areas of the US economy that were substantially in¯uenced by the outcome of the 1992 presidential race.…”

“…Homaifar et al (1988) examine US presidential elections between 1964 and 1984 and ®nd evidence that post-election values of defense stocks may depend on presidential election outcomes if the elected president has well-de®ned and strong positions on defense. They ®nd little evidence that Republicans are better for defense than are Democrats.…”

Do EPA Defendants Prefer Republicans? Evidence from the 2000 Election

“…Given the diversity of industries to which these companies belong, the last point seems unlikely. They are spread thinly across many different sectors, and not concentrated in a single politically sensitive industry, such as defense (Homaifar et al 1988).…”