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Partisan policy promises and sector-specific stock-market performance: evidence from Mexico's 2006 presidential campaign

Benton, A. L. (2013). Partisan policy promises and sector-specific stock-market performance: evidence from Mexico's 2006 presidential campaign. Business and Politics, 15(2), pp. 187-215. doi: 10.1515/bap-2012-0037


Scholars have long held that partisan politics cause aggregate-level fluctuations in markets. However, if investors hold different policy preferences, the effects of election campaigns on their behavior should be more nuanced. In particular, investors in economic sectors benefiting from neo-liberal economic policies might respond favorably to gains in support by right-leaning candidates, whereas those expected to profit from state-led economic development might react favorably to gains by left-leaning contenders. To test these propositions, I examine stock market performance by economic sector during Mexico's 2006 presidential race. Statistical analysis of pre-election polls and stock market returns during the campaign reveals that, although investors did not react to potential partisan policy change in the ways originally expected, they did respond to polling news differently by economic sector. The findings demonstrate the importance of disaggregating stock, bond, and currency markets according to economic criteria, and thus the limitations of aggregate level analysis for research on politics and markets.

Publication Type: Article
Additional Information: This article has been published in a revised form in Business and Politics, This version is free to view and download for private research and study only. Not for re-distribution or re-use. © V.K. Aggarwal 2013 and published under exclusive license to Cambridge University Press.
Subjects: F History United States, Canada, Latin America > F1201 Latin America (General)
H Social Sciences > HG Finance
J Political Science > JL Political institutions (America except United States)
Departments: School of Arts & Social Sciences > International Politics
Date available in CRO: 31 Oct 2019 14:38
Date deposited: 30 October 2019
Date of first online publication: 20 January 2017
Text - Accepted Version
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