Company stock price reactions to the 2016 election shock: Trump, taxes, and trade

• 成果类型: Article
• 署名作者: Wagner, Alexander F.; Zeckhauser, Richard J.; Ziegler, Alexandre
• 署名单位: University of Zurich; Swiss Finance Institute (SFI); Harvard University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2018.06.013
• 发表日期: 2018
• 页码: 428-451
• 关键词: STOCK RETURNS; event study; corporate taxes; Trade policy; Corporate interest payments; Post-news drift; Election surprise; market efficiency; Price contribution analysis

摘要

Donald Trump's surprise election shifted expectations: corporate taxes would be lower and trade policies more restrictive. Relative stock prices responded appropriately. High-tax firms and those with large deferred tax liabilities (DTLs) gained: those with significant deferred tax assets from net operating loss carryforwards (NOL DTAs) lost. Domestically focused companies fared better than internationally oriented firms. A price contribution analysis shows that easily assessed consequences (DTLs, NOL DTA5, tax rates) were priced faster than more complex issues (net DTLs, foreign exposure). In sum, the analysis demonstrates that expectations about tax rates greatly impact firm values. (C) 2018 Elsevier B.V. All rights reserved.