As the primary entity responsible for new legislation, Congress is capable of enacting legislation that may affect future market returns. To examine potential effects, the percentage of the House of Representatives and Senate controlled by a political party is examined. Additionally, the effect on returns in a change in the percentage of seats gained or lost in Congressional elections is analyzed. To test both theories, a modified “partisan view” model is adopted. Results point to the fact that equity markets perform better in situations in which power is distributed between political parties.
V. L. Ovlia et al., "The Effects of Congressional Elections on Future Equity Market Returns," Global Journal of Business Research, vol. 2, no. 1, pp. 1-15, Institute for Business and Finance Research (IBFR), Jan 2008.
Engineering Management and Systems Engineering
Article - Journal
© 2008 Institute for Business and Finance Research (IBFR), All rights reserved.
01 Jan 2008