Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149936
Authors: 
Asongu, Simplice
Nwachukwu, Jacinta C.
Year of Publication: 
2016
Series/Report no.: 
AGDI Working Paper WP/16/012
Abstract: 
This paper assesses the effect of political institutions on stock market performance in 14 African countries for which stock market data is available for the period 1990-2010. The estimation technique used is a Two-Stage-Least Squares Instrumental Variable methodology. Political regime channels of democracy, polity and autocracy are instrumented with legal-origins, religious-legacies, income-levels and press-freedom qualities to account for stock market performance dynamics of capitalization, value traded, turnover and number of listed companies. The findings show that countries with democratic regimes enjoy higher levels of financial market development compared to their counterparts with autocratic inclinations. As a policy implication, the role of sound political institutions has important effects on both the degree of competition for public office and the quality of public offices that favour stock market development on the African continent.
Subjects: 
Financial Markets
Government Policy
Development
JEL: 
G10
G18
G28
P16
P43
Document Type: 
Working Paper

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