Political crises and risk of financial contagion in developing countries: Evidence from Africa

Simplice A, Asongu (2011): Political crises and risk of financial contagion in developing countries: Evidence from Africa. Published in: Journal of Economics and International Finance , Vol. 3, No. 7 (1 July 2011): pp. 462-467.

Abstract

The recent waves of political crises in Africa and the Middle East have inspired the debate over how political instability could pose a risk of financial contagion to emerging countries. With retrospect to the Kenyan political crisis, our findings suggest stock markets in Lebanon, Mauritius were contaminated while Nigeria experienced a positive spillover. Our results have two major implications. Firstly, we have confirmed existing consensus that African financial markets are increasingly integrated. Secondly, we have also shown that international financial market transmissions not only occur during financial crisis; political crises effects should not be undermined.

• Item Type: MPRA Paper
• Language: English
• Keywords: Political crisis, contagion, developing countries, equity markets
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa; F - International Economics > F5 - International Relations, National Security, and International Political Economy > F50 - General; F - International Economics > F3 - International Finance > F30 - General; G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets; G - Financial Economics > G1 - General Financial Markets > G10 - General

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