Impact of Regulations on Firm Value: Evidence from the 2016 U.S. Presidential Election.

Autor:	Kundu, Santanu
Předmět:	BUSINESS enterprises RATE of return on stocks UNITED States presidential election 2016 REGULATION of financial institutions
Zdroj:	Journal of Financial & Quantitative Analysis; Jun2024, Vol. 59 Issue 4, p1659-1691, 33p
Abstrakt:	Using the 2016 U.S. presidential election result as a shock to the expectations about the future regulatory environment, I find that most regulated firms earned approximately 4% higher cumulative abnormal stock returns than least regulated firms during the first 10 trading days after the election. Exploring economic mechanisms, I find evidence consistent with the explanation that more regulations disproportionately harm high-growth firms and allow incumbent firms to extract rents through lower competition and political favoritism. Stock returns are also followed by a shift in firm fundamentals over 3 years after 2016, consistent with the economic mechanisms. [ABSTRACT FROM AUTHOR]
Databáze:	Complementary Index
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