Political effects

The Influence of General Strikes on Stock Market Behavior

By | Social dialogue


Using a sample of 76 countries, this paper examines the impact of major strikes against government and its policies on stock market behavior. An occurrence of a general strike is detrimental to the value of equities, as documented by the ceteris paribus 5.12% fall in dollar-denominated stock market indices of the affected countries. This event is also accompanied by a statistically significant increase in risk, as measured by the standard deviation of returns and Value-at-Risk metrics. Taken together, these results imply that investors should try to avoid investing in stock markets of countries where general strikes are likely to transpire.

For the original source, please click here.