Three Massachusetts Institute of Technology researchers, Daron Acemoglu, Tarek A. Hassan and Ahmed Tahoun have released an analysis titled, “Study connects stocks, democracy, and the Arab Spring: Study shows how seriously investors took the possibility of a democratic revolution during Egypt’s Arab Spring” in the journal titled “Review of Financial Studies“. Take a look at the abstract”:
Unprecedented street protests brought down Mubarak’s government and ushered in an era of competition between three rival political groups in Egypt. Using daily variation in the number of protesters, we document that more intense protests are associated with lower stock market valuations for firms connected to the group currently in power relative to non-connected firms, but have no impact on the relative valuations of firms connected to rival groups. These results suggest that street protests serve as a partial check on political rent-seeking. General discontent expressed on Twitter predicts protests but has no direct effect on valuations.
A review of the work was posted by Science Daily adding the following information on the research:
Among its other findings, the study sheds light on the much-discussed relationship between social media and the Arab Spring uprisings of 2011. In this case, the scholars also found that Twitter activity forecast the amount of street protest that would ensue. By itself, social media activity did not immediately affect stock market valuations, but by encouraging public demonstrations, it had an indirect effect.
As covered on Democracy Chronicles, other unexpected factors that research suggests affect US voter turnout now include boredom, delayed onset adulthood, cigarette smoking, wind speed, bad weather forecasts and, as suggested today, just the rain. This type of research is highlighted in our Election Science archives as well as other important research in political science as it relates to democracy, the ultimate invention in political science. Be sure to also check out our Election Technology section and our articles on Technology Dissidents, the Internet and Voting or Voting Machines.