Date of Award
Bachelor of Arts
This paper explores the possibility of using the event-study methodology to evaluate industrial policies. I utilize historical stock returns from the energy, telecommunications, and steel industries to calculate abnormal market reactions to several informational releases surrounding the Obama administration's "American Reinvestment and Recovery Act". The results of the event-study indicate a positive evaluation of the polices, both during the informational releases and in months following the official legislation. However, several mathematical and theoretical caveats are highlighted in the literature and in this particular study. The findings suggest that event-studies can be used as an evaluation tool for industrial policy to some degree, but innate weakness call for caution in their implementation.
Raynaud, Lukas, "Evaluating Industrial Policies Using Event-Studies: Evidence from Stock Market Reactions to Obama's Stimulus Package" (2017). Economics Student Theses and Capstone Projects. 31.