Trump’s Effect on the Chinese Stock Market |
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Institution: | 1. Business School, The University of Queensland, Australia;2. Department of Business and Public Policy, Young Harris College, United States;3. Antai College of Economics and Management, Shanghai Jiao Tong University, China |
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Abstract: | U.S. President Donald J. Trump tweets frequently to communicate his thoughts to the public. We quantitatively evaluate the impact of Trump's China-related tweets on the Chinese stock market. We find that following Trump’s inauguration, his tweets with a positive sentiment significantly increase abnormal returns for the manufacturing industry in the Chinese stock market. Furthermore, an increase in the absolute value of his positive sentiment increases both the trading volume and volatility of the market. The positive effect is more pronounced for those subindustries with high exposure to international trade and stronger business relations with the United States than for other subindustries. The results are robust for various sensitivity tests. |
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Keywords: | Social media Trump’s effect Stock market Asset pricing |
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