How leadership turnover influences global financial markets

Yosef Bonaparte, Andrey Mikhailitchenko and Frank J. Fabozzi

Finance Research Letters, 2025, vol. 78, issue C

Abstract: The study examines how political regime turnover affects stock market performance. It hypothesizes that turnover rate influences political system quality and government governance, particularly political stability and effectiveness. Results show leadership turnover impacts global stock markets nonlinearly, with a peak effect occurring between 5.1 and 8.4 years, suggesting regimes should last at least 5 and, at most, 8 years. The research underscores the relationship between leadership changes and economic outcomes, emphasizing balanced political tenure to support stock market stability and reduce policy uncertainty.

Keywords: Leadership turnover; Political finance; Political stability; Regime tenure (search for similar items in EconPapers)
JEL-codes: G12 G15 G18 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:78:y:2025:i:c:s1544612325002442

DOI: 10.1016/j.frl.2025.106980

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