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Do markets pay attention to political disinformation?

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  • Hartwell, Christopher A.
  • Hubschmid-Vierheilig, Elena

Abstract

They do, but not in ways one might think. Using an example from the 2016 Presidential election in the United States, we show that days with heavy doses of disinformation related to the candidates do not affect broad index stock returns. However, disinformation that was strongly pro-Hillary Clinton was associated with a substantial lowering of conditional volatility of stocks, even when controlling for other macroeconomic news and news sentiment.

Suggested Citation

  • Hartwell, Christopher A. & Hubschmid-Vierheilig, Elena, 2024. "Do markets pay attention to political disinformation?," Finance Research Letters, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:finlet:v:70:y:2024:i:c:s1544612324013953
    DOI: 10.1016/j.frl.2024.106366
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    References listed on IDEAS

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    More about this item

    Keywords

    Disinformation; Elections; Trump; Clinton; Volatility; Confirmation bias;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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