Democracy, political risks and stock market performance
Abstract
This study examines the impacts of democracy and political risk on stock market. Using annualized panel data for 49 emerging markets for 2000–2012 we find evidence that democracy and political risk do have impact on stock market returns and the relationship between democracy and political risk is parabolic, i.e., there is a threshold level of democracy after which political risk begins to decline. Also our results suggest that decreases in political risk lead to higher returns.
Main Authors
Format
Articles
Research article
Published
2015
Series
Subjects
Publication in research information system
Publisher
Elsevier Ltd.
The permanent address of the publication
https://urn.fi/URN:NBN:fi:jyu-201602191620Use this for linking
Review status
Peer reviewed
ISSN
0261-5606
DOI
https://doi.org/10.1016/j.jimonfin.2015.06.002
Language
English
Published in
Journal of International Money and Finance
Citation
- Lehkonen, H., & Heimonen, K. (2015). Democracy, political risks and stock market performance. Journal of International Money and Finance, 59, 77-99. https://doi.org/10.1016/j.jimonfin.2015.06.002
License
Copyright© 2015 Elsevier Ltd. This is a final draft version of an article whose final and definitive form has been published by Elsevier. Published in this repository with the kind permission of the publisher.