The institutional and macroeconomic determinants of stock market development in emerging economies
- 21 October 2010
- journal article
- research article
- Published by Taylor & Francis Ltd in Applied Financial Economics
- Vol. 20 (21), 1615-1625
- https://doi.org/10.1080/09603107.2010.522519
Abstract
This article examines the institutional and macroeconomic determinants of stock market development using a panel data of 42 emerging economies for the period 1990 to 2004. This article finds that macroeconomic factors such as income level, gross domestic investment, banking sector development, private capital flows and stock market liquidity are important determinants of stock market development in emerging market countries. The results also show that political risk, law and order and bureaucratic quality are important determinants of stock market development because they enhance the viability of external finance. This result suggests that the resolution of political risk can be an important factor in the development of emerging stock markets.Keywords
This publication has 12 references indexed in Scilit:
- Understanding the Growth in Emerging Stock MarketsJournal of Emerging Market Finance, 2005
- Financial Policies and the Prevention of Financial Crises in Emerging Market EconomiesPublished by World Bank ,2001
- Macroeconomic Determinants of Stock Market DevelopmentJournal of Applied Economics, 1999
- Law, Finance, and Firm GrowthThe Journal of Finance, 1998
- Legal Determinants of External FinanceThe Journal of Finance, 1997
- Political Risk, Economic Risk, and Financial RiskCFA Magazine, 1996
- Stock Markets, Corporate Finance, and Economic Growth: An OverviewThe World Bank Economic Review, 1996
- Political Risk in Emerging and Developed MarketsCFA Magazine, 1996
- INSTITUTIONS AND ECONOMIC PERFORMANCE: CROSS‐COUNTRY TESTS USING ALTERNATIVE INSTITUTIONAL MEASURESEconomics & Politics, 1995
- Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment EquationsThe Review of Economic Studies, 1991