IDEAS home Printed from https://ideas.repec.org/a/aaw/journl/v3y2018i2p55-66.html
   My bibliography  Save this article

The Impact of Political Activities on PSX: The Evidence from Pakistan

Author

Listed:
  • Sami Ur Rahman

    (PhD Scholar, Abdul Wali Khan University Mardan, Mardan, KP, Pakistan.)

  • Ihtesham Khan

    (Assistant Professor,Department of Management Sciences, Abdul Wali Khan University Mardan, Mardan, KP, Pakistan.)

  • Muhammad Faizan Malik

    (Assistant Professor,Department of Management Sciences,Abdul Wali Khan University Mardan, Mardan, KP, Pakistan.)

Abstract

The aim of this research study is to find the association between political events in Pakistan and Pakistans stock exchange. The study considered 10 most big political events in Pakistan in the duration of 2012 to 2017. To calculate the results, the study used moving average method for calculating expected and abnormal returns. Further, t-statistics is used to explore the relationship between political events and behavior of PSX (100). The study has explored in results that political events, on which investor believes some change in Government policies do have impact on PSX. Investors respond positively when government organizations look strong and free from political pressure. The study recommended that government should make strong their organization, rather than alter government policies frequently.

Suggested Citation

  • Sami Ur Rahman & Ihtesham Khan & Muhammad Faizan Malik, 2018. "The Impact of Political Activities on PSX: The Evidence from Pakistan," Global Economics Review, Humanity Only, vol. 3(2), pages 55-66, December.
    • Handle: RePEc:aaw:journl:v:3:y:2018:i:2:p:55-66
    DOI: 10.31703/ger.2018(III-II).06
    as

    Download full text from publisher

    File URL: https://gerjournal.com/jadmin/Auther/31rvIolA2LALJouq9hkR/ayJtMTedjY.pdf
    Download Restriction: no
    File URL: https://www.gerjournal.com/issue/The-Impact-of-Political-Activities-on-PSX-The-Evidence-from-Pakistan
    Download Restriction: no
    File URL: https://libkey.io/10.31703/ger.2018(III-II).06?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
    2. repec:bla:jfinan:v:53:y:1998:i:6:p:2243-2257 is not listed on IDEAS
    3. Shahid Mahmood & Muhammad Irfan & Saeed Iqbal & Muhammad Kamran & Ali Ijaz, 2014. "Impact of Political Events on Stock Market: Evidence from Pakistan," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 4(12), pages 163-174.
    4. Shahid Mahmood & Muhammad Irfan & Saeed Iqbal & Muhammad Kamran & Ali Ijaz, 2014. "Impact of Political Events on Stock Market: Evidence from Pakistan," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 4(12), pages 163-174, December.
    5. Mian Sajid Nazir & Hassan Younus & Ahmad Kaleem & Zeshan Anwar, 2014. "Impact of political events on stock market returns: empirical evidence from Pakistan," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 30(1), pages 60-78, May.
    6. Blomberg, S. Brock & Hess, Gregory D. & Orphanides, Athanasios, 2004. "The macroeconomic consequences of terrorism," Journal of Monetary Economics, Elsevier, vol. 51(5), pages 1007-1032, July.
    7. Muhammad Wajid Raza & Hassan Muhsin, 2013. "Financial Liberalization and Macroeconomic Performance: Empirical Evidence from Selected Asian Countries," International Journal of Financial Economics, Research Academy of Social Sciences, vol. 1(1), pages 16-27.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Keshav Singhania & Girish, G. P., 2015. "Impact of macroeconomic events on shanghai stock exchange," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 5(6), pages 64-76, June.
    2. Ghulam Ghouse & Aribah Aslam & Muhammad Ishaq Bhatti, 2021. "Role of Islamic Banking during COVID-19 on Political and Financial Events: Application of Impulse Indicator Saturation," Sustainability, MDPI, vol. 13(21), pages 1-17, October.
    3. Ghulam Ghouse & Muhammad Ishaq Bhatti & Muhammad Hassam Shahid, 2022. "Impact of COVID-19, Political, and Financial Events on the Performance of Commercial Banking Sector," JRFM, MDPI, vol. 15(4), pages 1-18, April.
    4. Lucía Morales & Bernadette Andreosso-O’Callaghan, 2019. "Challenges and Opportunities Brought to the Chinese Economy by Brexit and the New US Administration," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 18(2), pages 145-171, August.
    5. Hon Chung Hui, 2021. "Were Foreign Exchange Markets Reacting Negatively to Political Events? The Case of Malaysia," South Asian Journal of Macroeconomics and Public Finance, , vol. 10(1), pages 105-129, June.
    6. Muhammad Kashif & Fatima Sultana & Muhammad Atif & Muhammad Aslam & Ammara Sarwar & Umar Farooq Awan & Muhammad Wasif Hanif, 2023. "COVID-19 Attack on Stock Markets: Event Study and Panel Data Analysis of Organization of Islamic Countries (OIC)," Journal of Economic Impact, Science Impact Publishers, vol. 5(1), pages 50-63.
    7. Ali M. Kutan & Mehmet E. Yaya, 2016. "Armed conflict and financial and economic risk: evidence from Colombia," Risk Management, Palgrave Macmillan, vol. 18(2), pages 159-187, August.
    8. Omar, Ayman M.A. & Wisniewski, Tomasz Piotr & Nolte, Sandra, 2017. "Diversifying away the risk of war and cross-border political crisis," Energy Economics, Elsevier, vol. 64(C), pages 494-510.
    9. Rasha Tawfiq Abadi & Florinda Silva, 2022. "Do Islamic fundamental weighted indices outperform their conventional counterparts? An empirical investigation during the crises in the MENA region," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 12(2), pages 241-266, June.
    10. Dirk Brounen & Jeroen Derwall, 2010. "The Impact of Terrorist Attacks on International Stock Markets," European Financial Management, European Financial Management Association, vol. 16(4), pages 585-598, September.
    11. Goel, Sanjay & Cagle, Seth & Shawky, Hany, 2017. "How vulnerable are international financial markets to terrorism? An empirical study based on terrorist incidents worldwide," Journal of Financial Stability, Elsevier, vol. 33(C), pages 120-132.
    12. Muhammad Tariq & Dr.Alam Raza & Azizullah & Ghulam Mustafa Shaikh, 2016. "Investing The Pricing Of Exchange Rate Risk In The Stock Market: Evidence From Pakistan Stock Market," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 12(2), pages 87-102.
    13. Ani SUMARMI & Dyah SAWITRI & Umi MUAWANAH & Abdul HALIM, 2021. "Indonesian Capital Market Investors’ Reaction To The Events Of The Covid-19 Pandemic," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 11(5), pages 138-157, October.
    14. Kollias, Christos & Manou, Efthalia & Papadamou, Stephanos & Stagiannis, Apostolos, 2011. "Stock markets and terrorist attacks: Comparative evidence from a large and a small capitalization market," European Journal of Political Economy, Elsevier, vol. 27(S1), pages 64-77.
    15. Supramono Supramono & Widhiastuti Wilis & I. Utami, 2017. "Market Reaction to Cabinet Reshuffle: The Indonesian Evidence," International Journal of Economics and Financial Issues, Econjournals, vol. 7(5), pages 183-188.
    16. Goodell, John W. & Kumar, Satish & Rao, Purnima & Verma, Shubhangi, 2023. "Emotions and stock market anomalies: A systematic review," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).
    17. Marco Stringa & Allan Monks, 2007. "Inter-industry contagion between UK life insurers and UK banks: an event study," Bank of England working papers 325, Bank of England.
    18. Radulovic, Dragan, 2012. "A direct bootstrapping technique and its application to a novel goodness of fit test," Journal of Multivariate Analysis, Elsevier, vol. 107(C), pages 181-199.
    19. Fenech, Jean-Pierre & Skully, Michael & Xuguang, Han, 2014. "Franking credits and market reactions: Evidence from the Australian convertible security market," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 32(C), pages 1-19.
    20. Bernard, Jean-Thomas & Idoudi, Nadhem & Khalaf, Lynda & Yelou, Clement, 2007. "Finite sample multivariate structural change tests with application to energy demand models," Journal of Econometrics, Elsevier, vol. 141(2), pages 1219-1244, December.

    More about this item

    Keywords

    PSX-100 index; T-statistics; Political Events; Event Study Methodology; Moving Average;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aaw:journl:v:3:y:2018:i:2:p:55-66. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: M Imran Khan (email available below). General contact details of provider: http://www.humanityonly.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.