Who will fare better in a political crisis?

Hsu Huei Huang, Min Lee Chan, Ann Shawing Yang

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

Because a political crisis may negatively affect stock returns, it is important for investors to know which firms will be affected less adversely by such a crisis. This study shows that firms that are controlled by families or have high growth opportunities will experience larger declines in their stock prices and a longer period of decline. Firms with outside directors, higher ratios of outside directors, or higher institutional shareholdings will experience smaller declines in their stock prices and a shorter period of decline. In other words, firms with better governance mechanisms and those considered value stocks will be less adversely affected by a political crisis; thus, their investors will suffer fewer negative effects.

Original languageEnglish
Pages (from-to)22-34
Number of pages13
JournalEmerging Markets Finance and Trade
Volume50
DOIs
Publication statusPublished - 2014 May 1

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics, Econometrics and Finance(all)

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