Gridlock versus harmony: the effect of presidential cycle Online publication date: Sun, 09-Jun-2013
by Oumar Sy; Ashraf Al Zaman
International Journal of Portfolio Analysis and Management (IJPAM), Vol. 1, No. 3, 2013
Abstract: In this paper, we investigate the impact of the interactions between presidential cycle and political environment on stock returns. We find that neither presidential cycle nor political environment has a significant impact on big firms. In contrast, we find that small firms perform significantly better under Democratic presidencies (relative to Republican presidencies) during harmonies, when one party simultaneously controls the executive and legislative bodies. Our results suggest that the recent evidence by Beyer et al. (2006) that a harmonious political environment is better for small firm investors is true only when the Democrats are in power.
Online publication date: Sun, 09-Jun-2013
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Portfolio Analysis and Management (IJPAM):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email firstname.lastname@example.org