• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Features

How stock markets respond to social unrest

4 years ago
in Features, highlights, Home, home-news, latest News, Markets, Opinions
2 min read
0 0
0
71
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

What happens to stock markets when social unrest—such as mass protests and riots–occurs? Are investors scared-off by the disorder? Or are they buoyed by the prospect of positive, popular change in response to unrest?

Our chart of the week, drawn from our recent IMF staff working paper, uses a new dataset of 156 social unrest events during 2011–20 to shed some light on these questions. It shows that in countries with more open and democratic institutions, social unrest events have a negligible impact on stock market returns (blue line). But in countries with more authoritarian regimes, the effect is large and negative: on average, stock market returns fall by 2 percent within 3 days, and by about 4 percent in the following month (black line).

These findings are consistent with real-world examples. For instance, stock markets in France – a country with strong and open institutions – were largely unmoved in the days after the Yellow Vest protests began in late 2018.

Of course, differences across countries could occur for many reasons other than political institutions. So, we also check that this relationship holds after accounting for other factors that might be correlated with the degree of institutional authoritarianism, including the severity of unrest and the country’s income level. 

chart

To dig deeper into what sort of institutions might be important, the paper runs further experiments using the six measures of social and political institutions that form the World Bank Governance Indicators.

Of these, two factors play a crucial role in mitigating negative stock market reactions to social unrest events: popular participation in government, and the ability of the government to regulate markets in ways that promote private sector development.

What sort of investor behavior might explain these patterns? One clue comes from the volume of shares traded, which increases sharply following a severe unrest event. As more trades occur when investors disagree on the value of an asset, a higher trading volume typically reflects more uncertainty over the outlook.

RelatedPosts

African Airlines Record 9.4% Growth In Air Cargo Demand In July 2025 – IATA

South African President Ramaphosa Launches G20 Taskforce to Tackle Global Wealth Inequality Amid US Absence

Burkina Faso’s Nationalization Rattles West Africa’s Gold Sector

This result thus suggests that social unrest impacts stock market returns through an indirect information channel rather than via direct disruption to economic activity.

Together, these results imply that in countries with high standards of governance, social unrest does not lead to more disagreement and uncertainty about future economic performance. This perhaps reflects the ability of more open institutions to reconcile divergent opinions and find compromises.

In contrast, this flexibility may be missing in more authoritarian systems. There, institutions may be less able to adapt to social problems, meaning that unrest can lead to rising fears of further uncertainty and deter investors.

Source: IMF
Via: norvanreports
Tags: social unreststock markets
No Result
View All Result

Highlights

Experts Talk BoG’s New Currency Controls & Crackdown on NPLs on NorvanReports’ X Space Discussions Tonight

Piastri Claims Pole Position in Thrilling Dutch Grand Prix Qualifying

US Open: Osaka, Alcaraz, Djokovic Shine as Gauff Joins Them in Last 16

Morocco Beat Madagascar to Secure Historic Third CHAN Title

$41bn Reserves vs Empty Pockets: When Will Relief Come For Nigerians?

Africa Emerges as Manufacturing Haven Amid US–India Trade Tensions

Trending

Aviation

African Airlines Record 9.4% Growth In Air Cargo Demand In July 2025 – IATA

August 31, 2025

African Airlines Record 9.4% Growth In Air Cargo Demand In July 2025 – IATA African airlines saw...

South African President Ramaphosa Launches G20 Taskforce to Tackle Global Wealth Inequality Amid US Absence

August 31, 2025

Burkina Faso’s Nationalization Rattles West Africa’s Gold Sector

August 31, 2025

Experts Talk BoG’s New Currency Controls & Crackdown on NPLs on NorvanReports’ X Space Discussions Tonight

August 31, 2025

Piastri Claims Pole Position in Thrilling Dutch Grand Prix Qualifying

August 31, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.