What the study found
The study found a significant market overreaction after Donald Trump was elected as the 45th president of the U.S., with low ESG (environmental, social, and governance) firms reacting positively and alternative energy firms reacting negatively.
Why the authors say this matters
The authors conclude that their findings cast doubt on the resilience of sustainable investments against market shocks.
What the researchers tested
The researchers used an event study approach to examine market reactions following the 2024 U.S. presidential election, focusing on low ESG firms, alternative energy stocks, and the role of ESG ratings in abnormal returns.
What worked and what didn't
The study reports significant positive abnormal returns for low ESG firms and significant negative abnormal returns for firms in the alternative energy sector after the election. It also finds that ESG rating plays a role in abnormal returns.
What to keep in mind
The abstract does not describe additional limitations, and the findings are limited to the event studied and the firms discussed in the abstract.
Key points
- The study reports a significant market overreaction after Donald Trump’s election.
- Low ESG firms showed positive abnormal returns in the aftermath.
- Alternative energy firms showed negative abnormal returns in the aftermath.
- ESG rating was found to play a role in abnormal returns.
- The authors say the findings cast doubt on the resilience of sustainable investments against market shocks.
Disclosure
- Research title:
- Trump election linked to overreaction in low-ESG and alternative energy stocks
- Authors:
- Riza Demirer, Asli Yuksel, Aydin Yuksel
- Institutions:
- Southern Illinois University Edwardsville, TED University
- Publication date:
- 2026-01-28
- OpenAlex record:
- View
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