The partisan policy cycle and firm valuation

Isa Camyar and Bahar Ulupinar

European Journal of Political Economy, 2013, vol. 30, issue C, 92-111

Abstract: Our research probes the firm valuation impact of partisan-motivated policy cycles. We first identify the micro-channels of policy transmission that link partisan policy disturbances to firm value. Then, we draw on firm-level data from 21 industrial democracies for the period extending from 1989 to 2008 to examine whether government partisanship has any distinct impact on firm value. We identify a surprisingly large and consistent positive relationship of left-oriented governments with firm value. Additionally, our research finds that the partisan impact on firm value is appreciably conditioned by factors like economic openness.

Keywords: Classical Partisan Theory; Political business cycle; Firm value; Fiscal policy; Monetary policy (search for similar items in EconPapers)
JEL-codes: G38 L25 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:30:y:2013:i:c:p:92-111

DOI: 10.1016/j.ejpoleco.2013.02.001

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