The Influence of the Political Party in Power on the Dow Jones Industrial Average: 1896–2001

Abstract

Recent research has focused on the influence of the political party of the US President on stock indices. This current paper extends this area of research by including the influence of the political party that holds the majority in Congress into the research design. The results do not support the hypothesis that there is a statistically significant relationship between the political party of the president and the return on the stock index. However, the political party with the majority in Congress is significantly related to the return on the index. The returns during Republican controlled Congresses are higher than returns during Democrat controlled Congresses.

Citation

Keef, S.P. and Roush, M. (2004), "The Influence of the Political Party in Power on the Dow Jones Industrial Average: 1896–2001", Review of Accounting and Finance, Vol. 3 No. 3, pp. 5-19. https://doi.org/10.1108/eb043405