The Dynamic Impact of Presidential Elections on the Stock Market: A Comparison between the United States and Taiwan
Author: Chi-chung Wang, Ya-yun Cheng
Abstract / Chinese PDF Download
In democratic societies, presidential elections have an impact on the economy. This study examines the dynamic impact of presidential elections on the stock market in two countries with different levels of democratic development and market maturity. The empirical results show that Taiwan’s 2000 presidential elections had a temporary impact on the stock market, which gradually developed into a structural shift. However, the stock market experienced a major shock after the 319 shooting incident during the 2004 presidential campaign. Nevertheless, the impact tailed off and the market eventually returned to normal. In contrast, in the United States, presidential elections have caused permanent structural shifts in stock market due to fundamental differences in economic policies offered by the candidates.