This study examines the ways political events can affect the stock prices of politically connected firms by studying one of the biggest corruption scandals in modern South Korean history, which led to the first-ever impeachment of a sitting president. We analyzed the stock returns of firms that donated money to foundations allegedly controlled by the president's confidante. We found that the abnormal stock returns of politically connected firms decreased when the president was removed from office. Using tick-by-tick stock price data, we were able to pinpoint the exact moments when the stock prices of firms that donated money fluctuated, as the president's fate was determined by the justices of the Constitutional Court.

Vice-presidents in Latin America have often been at the centre of political turbulence. To prevent conflicts within the executive, most Latin American countries have therefore put in place formulae to elect presidents and vice-presidents on a joint electoral ticket. Still, it is common for presidential candidates to pick running mates from other parties in order to construct alliances and appeal to a broader set of voters. But the presence of such ‘external’ vice-presidents seems to increase the risk of presidential interruption in general and impeachment processes in particular. Accordingly, we argue that the frequently overlooked institution of the vice-president deserves attention as a possible intervening variable that can contribute to the explanation for government crises and their outcomes in Latin America.