Title: Impact of change in political regimes on the stock market volatility: evidence from India

Authors: Peeyush Bangur; Sugandha Sharma

Addresses: Women's Institute for Studies in Development Oriented Management (WISDOM), Banasthali Vidyapith, Banasthali, Rajasthan, India ' ICFAI Law School (ILS), ICFAI University, Dehradun, India

Abstract: The main aim of the study is to link politics and the Indian capital market by testing the political business cycle and the partisan theory hypothesis. Further, this study also scrutinises how a change in the governing party affects the investment certainty in the Indian equity market. The main finding is that the study does not support the existence of a political business cycle in the Indian stock market and the Indian stock market has reacted differently to the victories of parties with different ideologies. Also, there is evidence of a reduction in volatility by 58.54% due to change in administration.

Keywords: political business cycle; PBC; Partisan theory; volatility; investment certainty; GARCH model; political party; performance analysis; India.

DOI: 10.1504/IJHRCS.2025.147386

International Journal of Human Rights and Constitutional Studies, 2025 Vol.12 No.3, pp.217 - 229

Received: 18 Aug 2023
Accepted: 26 Sep 2023
Published online: 15 Jul 2025 *

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