Political geography and stock market volatility : the role of political alignment across sentiment regimes

dc.contributor.authorCepni, Oguzhan
dc.contributor.authorDemirer, Riza
dc.contributor.authorGupta, Rangan
dc.contributor.authorPierdzioch, Christian
dc.date.accessioned2026-03-19T09:12:26Z
dc.date.available2026-03-19T09:12:26Z
dc.date.issued2026-02
dc.description.abstractWe study the nexus between political geography and stock market volatility by examining the interrelation between political geography and the predictive relation between the state- and aggregate-level stock market volatility via recently constructed measures of political alignment. Using data for 1994–2023 and random forests, we show that the importance of the state-level volatilities as drivers of aggregate volatility displays considerable variation in the cross-section and across time. Stronger political alignment of a state with the ruling party is associated with a lower contribution of the state's volatility to aggregate volatility. This negative link is significant during high-sentiment periods.
dc.description.departmentEconomics
dc.description.librarianhj2026
dc.description.sdgSDG-01: No poverty
dc.description.sdgSDG-08: Decent work and economic growth
dc.description.sponsorshipOpen Access funding enabled and organized by Projekt DEAL.
dc.description.urihttps://onlinelibrary.wiley.com/journal/14679485
dc.identifier.citationCepni, O., Demirer, R., Gupta, R. & Pierdzioch, C. (2026), Political Geography and Stock Market Volatility: The Role of Political Alignment Across Sentiment Regimes. Scottish Journal of Political Economy, 73: e70028: 1-24. https://doi.org/10.1111/sjpe.70028.
dc.identifier.issn0036-9292 (print)
dc.identifier.issn1467-9485 (online)
dc.identifier.other10.1111/sjpe.70028
dc.identifier.urihttp://hdl.handle.net/2263/109072
dc.language.isoen
dc.publisherWiley
dc.rights© 2025 The Author(s). Scottish Journal of Political Economy published by John Wiley & Sons Ltd on behalf of Scottish Economic Society. This is an open access article under the terms of the Creative Commons Attribution License.
dc.subjectInvestor sentiment
dc.subjectPolitical alignment
dc.subjectRandom forests
dc.subjectStock market volatility
dc.titlePolitical geography and stock market volatility : the role of political alignment across sentiment regimes
dc.typeArticle

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