So Oddly Calm. Democratization, Mass Mobilization and Stock Market Liquidity in Interwar Spain

Principal Investigator(s):  View help for Principal Investigator(s) Stefano Battilossi, Universidad Carlos III de Madrid; Stefan O. Houpt, Universidad Carlos III de Madrid

Version:  View help for Version V1

Name File Type Size Last Modified
Panel dataset.xls application/vnd.ms-excel 8.3 MB 03/23/2025 05:11:AM
app_a10_graph_ncris.jpg image/jpeg 33.8 KB 03/23/2025 03:23:AM
app_a8_graph_catpc1.jpg image/jpeg 33.7 KB 03/23/2025 02:44:AM
app_a9_graph_ecopolpc1.jpg image/jpeg 39.3 KB 03/23/2025 03:22:AM
do_file.txt text/plain 27.6 KB 03/23/2025 05:31:AM
fig01_graph_mobpc1.jpg image/jpeg 62.2 KB 03/23/2025 05:13:AM
fig02_graph_zerovol.jpg image/jpeg 54.2 KB 03/23/2025 02:43:AM
fig03a_graph_priceindex_bear.jpg image/jpeg 27.3 KB 03/23/2025 03:10:AM
fig03b_graph_liq_bear.jpg image/jpeg 53.9 KB 03/23/2025 02:45:AM
panel data.wf1 application/octet-stream 7.6 MB 03/23/2025 05:19:AM

Project Citation: 

Battilossi, Stefano, and Houpt, Stefan O. So Oddly Calm. Democratization, Mass Mobilization and Stock Market Liquidity in Interwar Spain. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2025-03-23. https://doi.org/10.3886/E223921V1

Project Description

Summary:  View help for Summary We study the effect of a rising demand for democratization on stock market liquidity across Spanish political regimes between 1914 and 1936. We use press news related to mass mobilization in favor of political and socio-economic reforms to build a monthly index of political uncertainty, and test its impact on different measures of stock liquidity based on daily data for the Madrid Stock Exchange. Our findings suggest that shifts in political uncertainty decreased trading and increased its price impact after the transition to a democratic regime in 1931. The results are in line with ambiguity-averse investors and are robust to controls for other sources of political and economic uncertainty. We also find that the effect was only partially driven by temporary and selective constraints on trading introduced by stock exchange authorities. This suggests that an open-ended process of democratization that challenged the socio-economic status quo generated radical uncertainty about future returns, leading to a persistent deterioration of market liquidity. Coeval financial chronicles support this interpretation.
Funding Sources:  View help for Funding Sources MICIU/AEI/10.13039/501100011033 (PID2023-149319NB-I00)

Scope of Project

Subject Terms:  View help for Subject Terms democratization; regime change; political uncertainty; stock market liquidity; ambiguity aversion; Spain; interwar period
Geographic Coverage:  View help for Geographic Coverage Spain
Time Period(s):  View help for Time Period(s) 1914 – 1936


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Release of this data has been delayed until 09/30/2025 at the request of the depositor.

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V1 [2025-03-23]

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