Partisan politics and stock market performance: The effect of expected government partisanship on stock returns in the 2002 German federal election

Füss, Roland; Bechtel, Michael M.

doi:10.1007/s11127-007-9250-1

Cited by 79 publications

(47 citation statements)

References 56 publications

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“…Evidence from short periods around the British general elections seems to indicate that the market prefers the rightist Conservative Party (Herron, 2000;Hudson et al, 1998;Gemmil, 1992), however when looking at the returns during the entire period in office, there appears to be no significant difference in nominal or real returns across Conservative and Labour governments (Hudson et al, 1998). Füss and Bechtel (2008) show that, during the 2002 German federal elections, returns on small stock were positively related to the probability of a right-leaning coalition victory, while Döpke and Pierdzioch (2006) argue that, in general, German stock returns tended to be marginally higher under right-wing than left-wing governments. Bialkowski et al (2007) use a comprehensive sample of 24 OECD countries to investigate the influence of political orientation of the executive on local stock market fluctuations.…”

Section: Political Orientation Of the Leadership And Stock Markementioning

confidence: 99%

Is There a Link between Politics and Stock Returns? A Literature Survey

Wisniewski

2015

SSRN Journal

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This survey starts by reviewing the literature investigating whether political connectedness of companies creates wealth for their shareholders. It then moves on to examine whether there is an association between the orientation of the political executive or the phase of the electoral cycle with movements of the stock market index. The price impact of politically-relevant events, such as wars, terrorist attacks, revolutions, coups or issuance of communications by those in positions of power is also discussed. The review closes with an examination of the impact of political uncertainty on stock markets and with a reflection on the direction of causality.JEL codes: G12; G14; G18; F50

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Section: Political Orientation Of the Leadership And Stock Markementioning

confidence: 99%

Is There a Link between Politics and Stock Returns? A Literature Survey

Wisniewski

2015

SSRN Journal

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“…For example, Roberts (1990), Shum (1995), Herron et al (1999), Herron (2000), Pantzalis et al (2000), Vuchelen (2003), Jensen and Schmith (2005), Leblang and Mukherjee (2005), Füss and Bechtel (2006) and Jayachandran (2006) find different degrees of convergence depending on time and country. Like Jayachandran (2006) we analyze the effect of a surprise political event.…”

Section: Introductionmentioning

confidence: 99%

The effects of surprise political events on quoted firms: the March 2004 election in Spain

Castells

Trillas

2011

SERIEs

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In the last days of the electoral campaign for the 2004 general election in Spain, on Thursday March 11th 2004, a series of simultaneous terror attacks caused the death of 191 persons in commuting trains in the capital Madrid. Four days later, the opposition party won the election, against all predictions that were made prior to the terror attacks. This change in expectations presents a unique opportunity to take advantage of event study techniques to test some politico-economic hypotheses. The quantitative exercise is carried out employing Seemingly Unrelated Regressions (SUR). Hypothesis testing is improved by means of bootstrapping techniques. Convergence theories prove quite resilient as, jointly, quoted firms were not significantly affected by the election outcome. The impact on politically connected companies and particular economic sectors, however, suggest that a combination of capture and agency problems may play a role in explaining the effects of the change in expectations.Keywords Event study · Median voter · Agency · Capture · Elections · Political connectionsWe thank Arnau Rovira (Universitat Pompeu Fabra) for excellent research assistance during this project. We acknowledge financial support from project ECO2010-20718.

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“…15 We separate our dataset into two sub-periods: 1 January 2004-31 December 2007 and 1 January 2008-14 March 2012 This separates the time frame into neat sub-samples with the US subprime crisis as a rough boundary. Prior to 2008, the global economic environment was robust; afterwards it was in perpetual recession or crisis.…”

Section: Resultsmentioning

confidence: 99%

Sovereign Risk, Elections, and Contagion

Balding

Lee

2013

SSRN Journal

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Partisan politics and stock market performance: The effect of expected government partisanship on stock returns in the 2002 German federal election

Abstract: Government partisanship, Stock market performance, Elections, GARCH modeling, Political information, Price formation, C12, G12, G38,

Cited by 79 publications

References 56 publications

Is There a Link between Politics and Stock Returns? A Literature Survey

Is There a Link between Politics and Stock Returns? A Literature Survey

The effects of surprise political events on quoted firms: the March 2004 election in Spain

Sovereign Risk, Elections, and Contagion

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