The Effects of 2016 U.S. Presidential Election on the Stock Exchange: Evidence from the U.S. Stock Market

Huy, P, Huynh, T, Pham, N, Ramiah, V and Moosa, I 2017, 'The Effects of 2016 U.S. Presidential Election on the Stock Exchange: Evidence from the U.S. Stock Market', in Proceedings of the 4th International Conference on Finance and Economics (ICFE 2017), Ho Chi Minh City, Vietnam, 21-22 September 2017, pp. 64-78.


Document type: Conference Paper
Collection: Conference Papers

Title The Effects of 2016 U.S. Presidential Election on the Stock Exchange: Evidence from the U.S. Stock Market
Author(s) Huy, P
Huynh, T
Pham, N
Ramiah, V
Moosa, I
Year 2017
Conference name ICFE 2017: Innovation and Sustainable Entrepreneurship
Conference location Ho Chi Minh City, Vietnam
Conference dates 21-22 September 2017
Proceedings title Proceedings of the 4th International Conference on Finance and Economics (ICFE 2017)
Publisher Libue Macáková - Melandrium
Place of publication Czech Republic
Start page 64
End page 78
Total pages 15
Abstract The paper investigates the effects of the 2016 U.S. presidential election on U.S. stock market. We examine 47 announcements starting from when President Trump announced that he would run for the Presidential election using event study methodology. Furthermore, we conduct several robustness tests including Corrado ranking, Chesney non-parametric conditional distribution approach, market integration and the removal of firms with firmspecific news. We observe that the U.S. stock market was widely affected by the 2016 U.S. Presidential election whereby life insurance sector was one of the most negatively affected sectors due to President Trump's plan to replace Obamacare. In addition, our results show that the events around the most recent election can lead to diamond risk structures in which the largest diamond risk structure appeared around the event when President Trump secured his Republican presidential nomination.
Subjects Financial Economics
Keyword(s) Presidential Election
Event Study
Abnormal Returns
Diamond Risk Structure
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ISBN 9788087990117
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