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Stock Returns and Government, France 1871-2008

29 Pages Posted: 7 May 2011 Last revised: 8 Nov 2015

David Le Bris

Toulouse Business School

Date Written: March 1, 2015


This article investigates the effects of governmental activity (turnover and color) on stock returns in France which suffered 150 different governments between 1871 and 2008. An appointment ends an uncertainty: when a government is appointed the average monthly stock price return is three times higher than for other months. France experienced many socialist governments. Surprisingly, the total real return averages 4.40% per year under Left versus 0.09% under Right governments. This difference is the first foreign confirmation of the US Presidential puzzle. This difference is robust to several explanations such as chance, outliers, risk and macro-economic context. But, assuming that the market anticipates color changes three months in advance, we move the boundaries: the difference becomes insignificant.

Keywords: Political puzzle, political impact, information uncertainty, stock returns, 19th century, 20th century

JEL Classification: G1, G18, H1, N23, N24

Suggested Citation

Le Bris, David, Stock Returns and Government, France 1871-2008 (March 1, 2015). Available at SSRN: or

David Le Bris (Contact Author)

Toulouse Business School ( email )

20, bd Lascrosses
Toulouse, 31068

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