The Partisan Policy Cycle and Firm Valuation

38 Pages Posted: 15 Mar 2011 Last revised: 20 Mar 2015

See all articles by Isa Camyar

Isa Camyar

University of Pennsylvania

Bahar Ulupinar

West Chester University of Pennsylvania

Date Written: March 19, 2015

Abstract

Our research probes the firm valuation impact of partisan-motivated policy cycles. We first identify the micro-channels of policy transmission that link partisan policy disturbances to firm value. Then, we draw on firm-level data from 21 industrial democracies for the period extending from 1989 to 2008 to examine whether government partisanship has any distinct impact on firm value. We identify a surprisingly large and consistent positive relationship of left-oriented governments with firm value. Additionally, our research finds that the partisan impact on firm value is appreciably conditioned by factors like economic openness.

Keywords: International Corporate Finance, Firm Value, Political Economy, Classical Partisan Theory, Political Business Cycle, Firm Value, Fiscal Policy, Monetary Policy

JEL Classification: G30, P16

Suggested Citation

Camyar, Isa and Ulupinar, Bahar, The Partisan Policy Cycle and Firm Valuation (March 19, 2015). European Journal of Political Economy, Vol. 30, 2013, Available at SSRN: https://ssrn.com/abstract=1786962 or http://dx.doi.org/10.2139/ssrn.1786962

Isa Camyar

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

Bahar Ulupinar (Contact Author)

West Chester University of Pennsylvania ( email )

West Chester, PA 19383
United States

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