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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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 |
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Partisan conflict Political disagreement Political sentiment Downside risk Finance Finance and Financial Management HUANG, Dashan WANG LIYAO, Partisan Conflict and Stock Price |
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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. |
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HUANG, Dashan WANG LIYAO, |
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HUANG, Dashan WANG LIYAO, |
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HUANG, Dashan |
title |
Partisan Conflict and Stock Price |
title_short |
Partisan Conflict and Stock Price |
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Partisan Conflict and Stock Price |
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Partisan Conflict and Stock Price |
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Partisan Conflict and Stock Price |
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partisan conflict and stock price |
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Institutional Knowledge at Singapore Management University |
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2018 |
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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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