Does Partisanship Shape Investor Beliefs? Evidence from the COVID-19 Pandemic

J. Anthony Cookson, Joseph Engelberg and William Mullins

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: We use party-identifying language – like “Liberal Media” and “MAGA”– to identify Republican users on the investor social platform StockTwits. Using a difference-in-difference design, we find that the beliefs of partisan Republicans about equities remain relatively unfazed during the COVID-19 pandemic, while other users become considerably more pessimistic. In cross-sectional tests, we find Republicans become relatively more optimistic about stocks that suffered the most from COVID-19, but more pessimistic about Chinese stocks. Finally, stocks with the greatest partisan disagreement on StockTwits have significantly more trading in the broader market, which explains 20% of the increase in stock turnover during the pandemic.

Keywords: COVID-19; Partisan; Stock market (search for similar items in EconPapers)
JEL-codes: D91 G12 P16 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

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https://www.econstor.eu/bitstream/10419/219453/1/Political_covid_v3.pdf (application/pdf)

Related works:
Working Paper: Does Partisanship Shape Investor Beliefs? Evidence from the COVID-19 Pandemic (2020)
Journal Article: Does Partisanship Shape Investor Beliefs? Evidence from the COVID-19 Pandemic
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:219453

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