Elections and political risk: New evidence from the 2008 Taiwanese Presidential Election

The impact of political majorities on firm value: Do electoral promises or friendship connections matter?

“…See alsoImai and Shelton (2011) for an analysis of campaign platforms in Taiwan. 3 See alsoFaccio and Parsley (2009), Cooper et al (2010), andAcemoglu et al (2013) for other studies of returns from connections in the United States,Fan et al (2007) andCheung et al (2010) for the effect of political connections on firm management in China,Faccio et al (2006) for political connections and corporate bailouts in a cross-section of countries, andJohnson and Mitton (2003),Khwaja and Mian (2005) andClaessens et al (2008) for political connections and access to finance in Thailand, Pakistan and Brazil, respectively.…”

Examining political connections to study institutional change: Evidence from two unexpected election outcomes in South Korea

“…Previous event studies show that the stock returns of politically connected firms respond systematically to unexpected political events (Acemoglu et al, 2016;Bechtel & Füss, 2010;Claessens et al, 2008;Fisman, 2001;Gaikwad, 2013;Goldman et al, 2009;Herron, Lavin, Cram, & Silver, 1999;Imai & Shelton, 2011;Jayachandran, 2006;Johnson & Mitton, 2003;Knight, 2006;Roberts, 1990aRoberts, , 1990bShon, 2010). These studies only use a singular political connection to estimate monetary benefits.…”

State-controlled companies and political risk: Evidence from the 2014 Brazilian election

“…This paper is related to a literature that studies the effects of elections on asset prices to gauge how different parties affect the economy. For example, Herron (2000) finds that higher interest rates and lower stock market prices were expected had the Labour Party won the British elections in 1992; Knight (2006) studies how the odds of a vitory for Bush or Gore in the 2000 American election affect the market value of politically sensitive firms and finds that policy platforms were capitalized into equity prices; Imai and Shelton (2011) show that 3 share prices of Taiwanese firms with investments in the mainland responded strongly to a positive electoral outlook for the party that advocates lifting caps on cross-strait investment in mainland China; Snowberg et al (2007) study how the Bush reelection in 2004 affected stock markets and find that electing a Republican President raises equity valuations by 2−3%. 4…”

“…For example,Herron et al (1999) andKnight (2006) use data from the Iowa Electronic Markets to back out the probability of each outcome in US presidential elections,Snowberg et al (2007) use the market-based probability of a Bush reelection in 2004 from TradeSports.com andImai and Shelton (2011) use data from a political prediction market in Taiwan.3Ferraz (2015) built and studied a prediction market for Brazilian elections. However, market participants used play money and there were clear arbitrage opportunities -for instance, selling all contracts the day before the election, implying a certain liability of $100, would yield $111.7.…”