Who Fears the Far Right? Aggregate and Firm-Level Evidence from Three Western European Stock Markets

Pedro L. Angosto-Fernández () and Victoria Ferrández-Serrano
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Pedro L. Angosto-Fernández: Universidad Miguel Hernández de Elche
Victoria Ferrández-Serrano: Universidad Miguel Hernández de Elche

Czech Journal of Economics and Finance (Finance a uver), 2021, vol. 71, issue 2, 144-177

Abstract: This research analyses the reaction of the Finnish, Austrian and Italian markets during the negotiations that led to the far-right’s entry into their governments. Using the event study methodology and by focusing on abnormal returns, different significant reactions are found at an aggregate level. One noteworthy result is the negative abnormal returns associated to bad news for European Union stability. The firm-level analysis confirms this evidence and highlights some determinants of the variability of returns in the cross-section: most notably the role of the business relationship with the EU when explaining the differences between winners and losers.

Keywords: financial markets; political risk; European political economy; elections; stock market reaction (search for similar items in EconPapers)
JEL-codes: D72 F23 G14 M21 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:71:y:2021:i:2:p:144-177

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