Yi-Shuan Chen

This paper examines the impacts of 29 opinion polls from three prominent media sources on 825 firms listed on the Taiwan Stock Exchange during the 2020 Taiwan presidential election campaign. In the election, the challenger Han adopted unprecedented election tactics of asking his supporters to mislead pollsters on their voting intentions, separating the sample polls published before and after the start of this election tactic into normal and chaotic periods. This study assumes that stock markets respond positively to the increased incumbent polling leads due to the reduced probability of future changes to economic policy only for the credible normal polls. A standard event study in a 3-day event window, one day before and after the event day, is employed to analyze the short polling effects on stock returns during the sample period. The estimation window is 120 days. The results indicate that market returns are positively associated with the changes in the incumbent’s lead only for the television’s normal polls, and markets react more strongly to decreased polling leads than to increased polling leads for television polls, as presumed by the uncertain information hypothesis. Analysis of the impact of polling during the chaotic period on investor sentiment indicates that the market has positive reactions to both positive and negative polling changes, suggesting the tactic creates confusion in the market. This paper concludes that markets may react differently to opinion polls depending on their source and candidates’ election tactics.