Not So Empty Threats: Stock Market Responses to the Trump Election and Protectionist Rhetoric*

Fulvio Silvy

The World Economy, 2025, vol. 48, issue 7, 1520-1533

Abstract: This paper examines how perceived geopolitical risks affect multinational firms using evidence from Donald Trump's surprise 2016 election, which was marked by hostile campaign rhetoric aimed at Mexico. The study combines an analysis of the stock market's reaction to Trump's election with measures of country‐specific international exposure to assess whether investors expected firms exposed to Mexico to perform significantly worse under the Trump administration. The results show that an increase in a firm's share of affiliates in Mexico is associated with a 13 times larger drop in abnormal returns compared to similar modifications in exposure to other foreign countries.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/twec.13709

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:48:y:2025:i:7:p:1520-1533

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0378-5920

Access Statistics for this article

The World Economy is currently edited by David Greenaway

More articles in The World Economy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().