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Democracy, political risks and stock market performance

Listed author(s):
  • Lehkonen, Heikki
  • Heimonen, Kari
Registered author(s):

    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.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0261560615001023
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    Article provided by Elsevier in its journal Journal of International Money and Finance.

    Volume (Year): 59 (2015)
    Issue (Month): C ()
    Pages: 77-99

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    Handle: RePEc:eee:jimfin:v:59:y:2015:i:c:p:77-99
    DOI: 10.1016/j.jimonfin.2015.06.002
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30443

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