This paper investigates the presidential puzzle (Santa-Clara and Valkanov, 2003) -- the fact that the equity premium is 10% higher in years with Democratic governments than in years with Republican governments. I find the existence of a negative price reaction after Democratic victories in...

I study the effect of partisan politics on stock returns in Latin America. There is a negative market reaction when left-wing parties win presidential elections. However, the observed democratic premium in the U.S. is not observed. Firms have higher returns when the president is from a Centrist...

I investigate the effect of different measures of corporate taxes on stock returns. The results support the partisan politics cycle effect on equity returns. A high minus low (Hi-Lo) portfolio sorted by (Total Corporate Taxes/Total Assets) has an annual return of +3.8% during Republican...

This paper studies the effect of partisan politics on stock returns in the U.S. by exploring different measures of corporate taxes. The results support the partisan politics cycle effect on equity returns. The cross-sectional analysis shows that the measures of corporate taxes impact stock...