Interest Group Activity and Long-Run Stock Market Performance

Bonnie Wilson () and Dennis Coates ()

Working Papers from Department of Economics, John Cook School of Business, Saint Louis University

Abstract: 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.

Keywords: special interest groups; institutional sclerosis; stock returns; volatility (search for similar items in EconPapers)
JEL-codes: D7 G1 G2 L5 O16 (search for similar items in EconPapers)
Date: 2007-04

Forthcoming in Public Choice.

Downloads: (external link)
http://jcsb.slu.edu/repec/slu/wilsonbe0702.pdf First version, April 2007.

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Journal Article: Interest group activity and long-run stock market performance (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:slu:wpaper:2007-02

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