Washington Policy Analysts and the Propagation of Political Information

48 Pages Posted: 10 Aug 2017 Last revised: 29 Jun 2021

See all articles by Daniel Bradley

Daniel Bradley

University of South Florida

Sinan Gokkaya

Department of Finance, Ohio University

Xi Liu

Miami University of Ohio - Richard T. Farmer School of Business Administration

Roni Michaely

The University of Hong Kong; ECGI

Date Written: June 02, 2021

Abstract

Washington policy-research analysts (WAs) monitor political developments and produce research to interpret the impact of these events. We find institutional clients generate superior returns on their politically sensitive trades and channel more commissions to brokerages providing policy research. Further, WA policy-research reports are associated with significant market reactions. Finally, sell-side analysts with access to WA issue superior stock recommendations. These effects are particularly acute during periods of high political uncertainty. Overall, we uncover a new conduit through which political information filters into asset prices.

Keywords: Policy analysts; policy research; political uncertainty; trading commissions; institutional trading; sell-side analysts

JEL Classification: L50, G10, G18, G20, G23

Suggested Citation

Bradley, Daniel and Gokkaya, Sinan and Liu, Xi and Michaely, Roni, Washington Policy Analysts and the Propagation of Political Information (June 02, 2021). Available at SSRN: https://ssrn.com/abstract=3016082 or http://dx.doi.org/10.2139/ssrn.3016082

Daniel Bradley

University of South Florida ( email )

Tampa, FL 33620
United States

Sinan Gokkaya (Contact Author)

Department of Finance, Ohio University ( email )

207 Muck College of Business
Athens, OH 45701
United States

HOME PAGE: http://business.ohio.edu/about/faculty-staff/gokkaya-sinan/

Xi Liu

Miami University of Ohio - Richard T. Farmer School of Business Administration ( email )

Oxford, OH 45056
United States

Roni Michaely

The University of Hong Kong ( email )

Pokfulam Road
Hong Kong, Pokfulam HK
China

ECGI ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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