Review article
https://doi.org/10.1080/1331677X.2020.1756370
Market reactions to unexpected political changes: evidence from advance emerging markets
Blazej Podgorski
Abstract
The main aim of this article is to assess the influence of change
in Prime Minister on Polish stock market. Prime Minister Szydło
resigned shortly after she survived the second vote of no confidence
on December 8, 2017, and was replaced by Morawiecki,
the Vice-Prime Minister and Minister of Finance, and a former
CEO of a large bank.1 Considering the aforementioned context,
this study tests four hypotheses regarding the market reaction in
terms of companies’ shareholder structure. An event study analysis
was performed to calculate cumulative abnormal returns,
and regression models were estimated to test the hypotheses.
The author finds significant negative price changes only for stateowned
enterprises (SOEs) both directly and indirectly controlled
by the government. I assume that this reaction in the case of
SOEs was caused by the uncertainty related to the likely changes
in the management.
Keywords
Prime Minister change; state-owned companies; event study; stock prices; market reaction
Hrčak ID:
254463
URI
Publication date:
9.2.2021.
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