Effects of Economic and Political Events on Stock Returns: Event Study of the Agrokor Case in Croatia

Abstract

Major events in Croatia regarding economy and politics in the last three years have been related to the Agrokor concern. Agrokor is one of the biggest companies/concerns in Croatia and Southeastern Europe. Since some of Agrokor’s stocks are listed on the Croatian stock market, the economic and political events regarding Agrokor have affected the stock market as well to an extent. In this study we observe the effects of several economic and political events on stock returns on the Zagreb Stock Exchange, by dividing the sample into two groups. The first group consists of Agrokor’s stocks and the other group consists of stocks of other companies which are listed and frequently traded on the market. The methodology used in the study was event study, by using parametric and non-parametric tests. The results indicate that specific economic and political events have affected Agrokor’s stock returns negatively. Other stock returns were not affected, or were affected positively, but not statistically significantly.