Patriotic name bias and stock returns
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Date
2011-09-01
Authors
Benos, Evangelos
Jochec, Marek
Journal Title
Journal ISSN
Volume Title
Publisher
Social Science Reserach Network (SSRN) http://www.ssrn.com/en/
Abstract
Companies whose names contain the words “America(n)” or “USA” earn positive abnormal
returns of about 6% per annum during the Second World War, the War in
Korea and the War on Terror. These abnormal returns are not realized immediately
upon the outbreak of each of the wars but are accumulated gradually during wartime.
Given that no such effect is observed for the Vietnam War, we hypothesize that major,
victorious wars arouse investors’ patriotic feelings and cause them to gradually and
perhaps subconsciously gravitate toward stocks whose name has a patriotic flavor.
Description
Keywords
patriotic name bias, stock returns