The U.S. Presidential Election 2012/2016 and Investors’ Sentiment
The Case of CBOE Market Volatility Index
Bibliographic Data
| ID | 18096016 |
|---|---|
| Authors | Imlak Shaikh (0000-0001-5704-9938, Management Development Institute, corresponding author) |
| Year | 2019 |
| Volume | 9 |
| Issue | 3 |
| Publication date | 2019-07-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | SAGE Open (JOURNAL) |
| Journal identifiers | ISSN: 2158-2440 • E-ISSN: 2158-2440 |
| Publisher | SAGE Publications (PUBLISHER • US) |
| DOI | 10.1177/2158244019864175 |
| OpenAlex | W2963587814 |
| Language | EN |
| Citations received | 3 |
| References cited | 41 |
Given that political events have substantial effect on new economic policies and economic performance of the country, this article aims to examine the behavior of the investors’ sentiment in terms of implied volatility index trailed by the U.S. presidential elections. The study empirically tests whether the presidential elections in 2012/2016 do contain the important market inclusive information to explain the expected stock market volatility. The findings indicate that investors’ concern was distracted around the presidential elections window, albeit the market performed identically in both the presidential election years. The significant fall in the implied volatility level (post-election period) is the calm before the storm, just wait and watch. The positive estimate uncovers the fact that investor worries were higher before the election day. In particular, the significant estimate of the presidential election debate shows that investors do regard the minutes of the presidential election debates in their portfolio selection. At the two elections era, on the candidacy of both the parties, the empirical result speaks marginally contrasting outcomes and falsifies the presidential election cycle hypothesis of past 29 U.S. election years. Empirical estimates conclude that the presidential elections in 2012/2016 have a strong, significant relationship with investor’s sentiment and stock market performance
Economics · Financial economics · Monetary economics · Political science · Politics · Presidential election · Presidential system · Stock market · Financial Markets and Investment Strategies · Fiscal Policies and Political Economy · Law · Market Dynamics and Volatility
Measuring Economic Policy Uncertainty
The Political Business Cycle
Markets as Predictors of Election Outcomes
Can we insure against political uncertainty? Evidence from the U.S. stock market
Partisan politics and stock market performance
A Political Model of the Business Cycle
Market Responses to Politics
Political Institutions, Policy Expectations, and the 1980 Election
| Citations per year | 1 |
|---|---|
| Citation span | 2023 - 2025 (3) |
| Highly cited | No |