Authors:

  • Lauren Cohen
  • Christopher Malloy

Excerpt

Legislating Stock Prices. Lauren Cohen, Christopher Malloy, December 2013, Paper. "We demonstrate that legislation has a simple, yet previously undetected impact on stock prices. Exploiting the voting record of legislators whose constituents are the affected industries, we show that the votes of these "interested" legislators capture important information seemingly ignored by the market. A long-short portfolio based on these legislators' views earns abnormal returns of over 90 basis points per month following the passage of legislation..."  Link