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Financial development and stock returns: A cross-country analysis

  • Dellas, Harris
  • Hess, Martin

We examine stock returns in a cross section of emerging and mature markets (47countries) between 1980-99. The level of financial development turns out to be an important determinant of the performance of stock returns. In general, a deeper and higher quality banking system decreases the volatility of stock returns. It also contributes to a greater synchronization in the movements of domestic and world returns and the same obtains when the stock market is liquid.

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Article provided by Elsevier in its journal Journal of International Money and Finance.

Volume (Year): 24 (2005)
Issue (Month): 6 (October)
Pages: 891-912

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Handle: RePEc:eee:jimfin:v:24:y:2005:i:6:p:891-912
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30443

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