What explains trading behaviors of members of congress? Evidence from over 100,000 congressional stock trades

IF 4.8 2区经济学 Q1 BUSINESS, FINANCE

International Review of Economics & Finance Pub Date : 2024-09-06 DOI:10.1016/j.iref.2024.103591

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引用次数: 0

Abstract

Members of Congress (politicians) are allowed to trade stocks. There is evidence in the literature showing that politicians made informed trades until at least the passage of the Stop Trading on Congressional Knowledge (STOCK) Act of 2012. In this paper, we examine the drivers of congressional stock trading by using politicians’ daily stock trades (daily congressional trading) as the dependent variable. Our analysis is based on 181,029 congressional stock trades from 4630 trading days covering the period from January 2004 to June 2022. We find that politicians’ stock trades on a given day are positively related to their stock trades in the previous trading days. We further document that politicians trade more when Congress is in session and when geopolitical risk is high. We also find evidence of a significant reduction in the number of buy transactions following the passage of the STOCK Act. Furthermore, we show that politicians make more buy trades when economic policy uncertainty and equity market volatility are high. The results of our study suggest that members of Congress make trades to take advantage of the overall uncertainty in economic and political environments. Our paper contributes to the literature and the public debate on congressional trading (and trading by market participants in general) by providing further transparency on the stock trading practices of members of Congress.

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如何解释国会议员的交易行为？超过 100,000 次国会议员股票交易的证据

国会议员（政客）可以进行股票交易。文献中有证据表明，至少在 2012 年《停止国会知识交易法案》（STOCK）通过之前，政客们都是在知情的情况下进行交易的。在本文中，我们使用政治家的每日股票交易（每日国会交易）作为因变量，研究了国会股票交易的驱动因素。我们的分析基于 2004 年 1 月至 2022 年 6 月期间 4630 个交易日的 181029 次国会股票交易。我们发现，政治家在某一天的股票交易与其在前几个交易日的股票交易呈正相关。我们还发现，当国会开会和地缘政治风险较高时，政治家的交易量更大。我们还发现，在《股票法案》通过后，买入交易的数量大幅减少。此外，我们还发现，当经济政策不确定性和股市波动性较高时，政治家们会进行更多的买入交易。我们的研究结果表明，国会议员进行交易是为了利用经济和政治环境的整体不确定性。我们的论文为有关国会议员交易（以及市场参与者的一般交易）的文献和公开辩论做出了贡献，为国会议员的股票交易行为提供了进一步的透明度。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Review of Economics & Finance Multiple-

CiteScore

7.30

自引率

2.20%

发文量

253

期刊介绍： The International Review of Economics & Finance (IREF) is a scholarly journal devoted to the publication of high quality theoretical and empirical articles in all areas of international economics, macroeconomics and financial economics. Contributions that facilitate the communications between the real and the financial sectors of the economy are of particular interest.