دانلود رایگان مقاله بررسی ارتباط سیاست و بازده سهام

Abstract

This survey starts by reviewing the literature investigating whether political connectedness of companies creates wealth for their shareholders. It then moves on to examine whether there is an association between the orientation of the political executive or the phase of the electoral cycle with movements of the stock market index. The price impact of politically-relevant events, such as wars, terrorist attacks, revolutions, coups or issuance of communications by those in positions of power is also discussed. The review closes with an examination of the impact of political uncertainty on stock markets and with a reflection on the direction of causality.

8. Conclusions

The literature reviewed in this survey offers several useful observations. First, the connections between politicians and companies have the potential to generate benefits to both parties. As long as the politician does not appropriate all rents arising from the collaboration, shareholders are likely to profit. Secondly, certain predictable patterns have been observed in the US market. Stock returns tend to be higher during Democratic administrations and throughout the second half of a presidential term. However, investors should exercise caution, as similar anomalies are not necessarily observable in other countries. Thirdly, important political events imprint themselves on the distribution of stock returns. Wars, which frequently result in widespread destruction of human and physical capital, lead to stock market falls. Similarly, a terrorist attack is typically associated with stock price declines, although the market tends to rebound quickly when investors believe that it is a one-off unrepeatable event. Regime changes produced through revolutions and coups are likely to bene- fit some firms and disadvantage others, which seems to be efficiently reflected in the prices of individual stocks. Moreover, investors seem to react to political proclamations and speeches and carefully analyze their content. Lastly, political uncertainty is more important in emerging countries, where markets compensate investors for taking on such risk. This is perhaps because the likelihood of expropriation, nationalization, blocked funds or other types of detrimental government interference is higher in these countries.