Partisan Conflict and Stock Price

Partisan conflict has been one dominant theme in U.S. politics in recent years. By using the textual index of Azzimonti (2018), this paper shows that partisan conflict positively predicts market returns, controlling for economic predictors and proxies for uncertainty, disagreement, geopolitical risk...

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Main Authors: HUANG, Dashan, WANG LIYAO
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2018
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Online Access:https://ink.library.smu.edu.sg/lkcsb_research/6012
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7011/viewcontent/SSRN_id3221659__1_.pdf
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spelling sg-smu-ink.lkcsb_research-70112019-01-25T01:23:05Z Partisan Conflict and Stock Price HUANG, Dashan WANG LIYAO, Partisan conflict has been one dominant theme in U.S. politics in recent years. By using the textual index of Azzimonti (2018), this paper shows that partisan conflict positively predicts market returns, controlling for economic predictors and proxies for uncertainty, disagreement, geopolitical risk, and political sentiment. A one standard-deviation increase in partisan conflict is associated with a 0.58% increase in next month market return. The forecasting power concentrates in periods when the president is from the Republican Party or the majority of House is Republicans. Partisan conflict is positively related to downside risk, and makes investors more conservative when its value increases. 2018-11-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/6012 https://ink.library.smu.edu.sg/context/lkcsb_research/article/7011/viewcontent/SSRN_id3221659__1_.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Partisan conflict Political disagreement Political sentiment Downside risk Finance Finance and Financial Management
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Partisan conflict
Political disagreement
Political sentiment
Downside risk
Finance
Finance and Financial Management
spellingShingle Partisan conflict
Political disagreement
Political sentiment
Downside risk
Finance
Finance and Financial Management
HUANG, Dashan
WANG LIYAO,
Partisan Conflict and Stock Price
description Partisan conflict has been one dominant theme in U.S. politics in recent years. By using the textual index of Azzimonti (2018), this paper shows that partisan conflict positively predicts market returns, controlling for economic predictors and proxies for uncertainty, disagreement, geopolitical risk, and political sentiment. A one standard-deviation increase in partisan conflict is associated with a 0.58% increase in next month market return. The forecasting power concentrates in periods when the president is from the Republican Party or the majority of House is Republicans. Partisan conflict is positively related to downside risk, and makes investors more conservative when its value increases.
format text
author HUANG, Dashan
WANG LIYAO,
author_facet HUANG, Dashan
WANG LIYAO,
author_sort HUANG, Dashan
title Partisan Conflict and Stock Price
title_short Partisan Conflict and Stock Price
title_full Partisan Conflict and Stock Price
title_fullStr Partisan Conflict and Stock Price
title_full_unstemmed Partisan Conflict and Stock Price
title_sort partisan conflict and stock price
publisher Institutional Knowledge at Singapore Management University
publishDate 2018
url https://ink.library.smu.edu.sg/lkcsb_research/6012
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7011/viewcontent/SSRN_id3221659__1_.pdf
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