Abstract
Quebec's drive for sovereignty from Canada has been the source of political uncertainty for decades in Canada. This paper studies empirically stock market's reaction to the announcements of business relocations from the province of Quebec to other provinces within Canada. Similar announcements about Toronto are used for control. Empirical results show that the market's reaction to the announcements of business relocations (a) from Quebec is positive, (b) from Toronto is negative, and (c) to Toronto is positive. The difference in abnormal returns between the Quebec and Toronto samples is positive and significant.
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