National pride, investor sentiment, and stock markets

This paper investigates the stock market reaction to an uplift in investor mood anticipating a country's independence day celebration. A crosscountry analysis reveals a positive abnormal return on the trading day immediately prior to the country's independence day. This finding is robust to various event-study methods and to various benchmarks. This positive return is subsequently reversed. Further, we find a relation between the abnormal return of a country on its independence day and measures of national pride and social culture. Focusing on the United States, we find a decrease in economic uncertainty measures on its independence day. Overall, our evidence suggests that national pride leads to investor sentiment in capital markets.

Automated summary

This paper investigates the impact of investor sentiment on the stock market prior to a country's independence day celebration. The study finds a positive abnormal return on the trading day before the independence day, which is subsequently reversed. Additionally, the study reveals a connection between the abnormal return and measures of national pride and social culture. In the case of the United States, the study also shows a decrease in economic uncertainty on its independence day.