Political wing and stock returns in Latin America: is there a relationship?

Descripción

This research examines the effect of political orientation on stock returns in six Latin American countries during the period 1995-2021. The results show that the election of a president with left-wing economic and political ideologies generates negative abnormal returns in the stocks of Argentina, Brazil, Chile, Mexico, and Peru. On the one hand, the event study, which measures the short-term effect, determines that the announcement of the victory of a left-wing president generates, on average, negative abnormal returns of -5.15% the day after the election. On the other hand, the portfolio study, which considers a medium-term effect, suggests that the average return of a right-wing portfolio is higher than that of a left-wing portfolio by 1.78 percentage points. Political orientation
is a factor that significantly impacts stock returns in emerging countries since political uncertainty plays an important role in their economies, the performance of companies, and, consequently, the returns generated by their stocks.

Período	24 set. 2025 → 27 set. 2025
Título del evento	XXV International Finance Conference 2025
Tipo de evento	Conferencia
Ubicación	Cuenca , EcuadorMostrar en mapa
Grado de reconocimiento	Internacional