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Who Fears the Far Right? Aggregate and Firm-Level Evidence from Three Western European Stock Markets

Author

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  • Pedro L. Angosto-Fernández

    (Universidad Miguel Hernández de Elche)

  • Victoria Ferrández-Serrano

    (Universidad Miguel Hernández de Elche)

Abstract

This research analyses the reaction of the Finnish, Austrian and Italian markets during the negotiations that led to the far-right’s entry into their governments. Using the event study methodology and by focusing on abnormal returns, different significant reactions are found at an aggregate level. One noteworthy result is the negative abnormal returns associated to bad news for European Union stability. The firm-level analysis confirms this evidence and highlights some determinants of the variability of returns in the cross-section: most notably the role of the business relationship with the EU when explaining the differences between winners and losers.

Suggested Citation

  • Pedro L. Angosto-Fernández & Victoria Ferrández-Serrano, 2021. "Who Fears the Far Right? Aggregate and Firm-Level Evidence from Three Western European Stock Markets," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 71(2), pages 144-177, October.
    • Handle: RePEc:fau:fauart:v:71:y:2021:i:2:p:144-177
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    File URL: https://journal.fsv.cuni.cz/mag/article/show/id/1484
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    More about this item

    Keywords

    financial markets; political risk; European political economy; elections; stock market reaction;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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