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Is Corruption Detrimental For Stock Returns? Evidence From A Panel Of Latin American Firms (2004-2013): A Note

Author

Listed:
  • Carlo Bellavite Pellegrini

    (Institute of Economic Policy and Center for Applied Economics (CSEA), Catholic University of the Sacred Heart)

  • Raul Caruso

    (Institute of Economic Policy and Center for Applied Economics (CSEA), Catholic University of the Sacred Heart.)

Abstract

This paper empirically investigates the impact of national level of corruption on stock returns for a panel of listed firms in Latina America for the period 2004-2013. Two measures of corruption are used. Results are mixed. Only when considering a measure of public capacity in the control of corruption, coefficients exhibit statistically significant relationships. This can be considered a plausible indirect cost of corruption. In fact, if governance of economy loses flexibility in order to prevent corruption, it can also become detrimental for economic returns.

Suggested Citation

  • Carlo Bellavite Pellegrini & Raul Caruso, 2017. "Is Corruption Detrimental For Stock Returns? Evidence From A Panel Of Latin American Firms (2004-2013): A Note," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 125(1), pages 3-12.
    • Handle: RePEc:vep:journl:y:2017:v:125:i:1:p:3-12
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    More about this item

    Keywords

    Corruption; Stock Returns; Latin America.;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G3 - Financial Economics - - Corporate Finance and Governance

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