Finance and Politics: Does the Stock Market Prefer the Left?

Gérard CHARREAUX Professeur émérite en sciences de gestion, université de Bourgogne et de Franche-Comté (IAE Dijon), Crego EA 7317. Contact : gerard.charreaux@gmail.com.

In the United States, stock market performance seems to be significantly higher when the Democrats are in power. Although tests are rarer, it seems that such a partisan premium also exists in France under the Left. The objective of this article is to verify whether the existence of such a premium is confirmed over the period 1981-2016 when the method used allows neutralizing the impact of the international conjuncture. The point of view is that of a US investor who manages an internationally diversified portfolio. The results confirm the existence of a partisan premium in favour of the Left.