Political orientation of government and stock market returns

Jedrzej Bialkowski, Katrin Gottschalk and Tomasz Wisniewski

MPRA Paper from University Library of Munich, Germany

Abstract: Prior research documented that U.S. stock prices tend to grow faster during Democratic administrations than during Republican administrations. This letter examines whether stock returns in other countries also depend on the political orientation of the incumbents. An analysis of 24 stock markets and 173 different governments reveals that there are no statistically significant differences in returns between left-wing and right-wing executives. Consequently, international investment strategies based on the political orientation of countries' leadership are likely to be futile.

Keywords: Stock market returns; Politics; Presidential puzzle (search for similar items in EconPapers)
JEL-codes: G11 G14 G15 (search for similar items in EconPapers)
Date: 2006-07, Revised 2006-11
New Economics Papers: this item is included in nep-cdm, nep-cfn, nep-pbe, nep-pol and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:307

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