Abstract
This article investigates the effects of governmental activity (turnover and color) on stock returns in France which suffered 150 different governments between 1871 and 2008. An appointment ends an uncertainty: when a government is appointed the average monthly stock price return is three times higher than for other months. France experienced many socialist governments. Surprisingly, the total real return averages 4.40% per year under Left versus 0.09% under Right governments. This difference is the first foreign confirmation of the US Presidential puzzle. This difference is robust to several explanations such as chance, outliers, risk and macro-economic context. But, assuming that the market anticipates color changes three months in advance, we move the boundaries: the difference becomes insignificant.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
