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Democracy and stock market performance in developing countries


  • Simplice A, Asongu


This is paper is a natural extension of Yang (2011) where-in democracy is not positively related to stock market development. We postulate that when moment conditions of stock market performance are accounted for, democracy improves financial markets in developing countries. Channels of democracy, polity and autocracy are instrumented with legal-origins, religious-legacies, income-levels and press-freedom qualities. As a policy implication democracies have important effects on both the degree of competition for public office and the quality of public policies that favor stock market performance in developing countries.

Suggested Citation

  • Simplice A, Asongu, 2011. "Democracy and stock market performance in developing countries," MPRA Paper 35506, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:35506

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    References listed on IDEAS

    1. Simplice A., Asongu, 2011. "Law, Finance and Investment: does legal origin matter?," MPRA Paper 34698, University Library of Munich, Germany.
    2. Simplice A. Asongu, 2015. "Law,Finance, Economic Growth and Welfare: Why Does Legal Origin Matter?," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 7(2), pages 30-55, July.
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    More about this item


    Financial Markets; Government Policy; Political Economy; Development;

    JEL classification:

    • P43 - Economic Systems - - Other Economic Systems - - - Finance; Public Finance
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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