Democracy and stock market performance in developing countries

Simplice A, Asongu (2011): Democracy and stock market performance in developing countries.

Abstract

This is paper is a natural extension of Yang (2011) where-in democracy is not positively related to stock market development. We postulate that when moment conditions of stock market performance are accounted for, democracy improves financial markets in developing countries. Channels of democracy, polity and autocracy are instrumented with legal-origins, religious-legacies, income-levels and press-freedom qualities. As a policy implication democracies have important effects on both the degree of competition for public office and the quality of public policies that favor stock market performance in developing countries.

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial Markets; Government Policy; Political Economy; Development
• Subjects: P - Economic Systems > P4 - Other Economic Systems > P43 - Public Economics ; Financial Economics; G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation; G - Financial Economics > G1 - General Financial Markets > G10 - General; P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy

References

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