Elections and political risk: New evidence from the 2008 Taiwanese Presidential Election

Masami Imai and Cameron Shelton

Journal of Public Economics, 2011, vol. 95, issue 7-8, 837-849

Abstract: We examine the effects of party platforms on the economic opportunities of firms using a unique data set from a political prediction market in Taiwan, a country with two dominant parties whose political cleavage derives mainly from a single issue: the "One China Principle". We find that during the 2008 Presidential campaign, the share price of Taiwanese firms with investments in the mainland responded strongly and positively to a positive electoral outlook for the KMT, the party which advocates lifting caps on cross-strait investment in mainland China. The response is strongest for those firms who have already hit their caps.

Keywords: Partisan; effects; Taiwan (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:95:y:2011:i:7-8:p:837-849

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