Political Crises and the Stock Market Integration of Emerging Markets
26 Pages Posted: 4 Dec 2010
Date Written: November 2, 2010
Abstract
This paper investigates the role of political crises in explaining the change in the degree of stock market integration for emerging markets over the period 1991-2006. Using a unique database, the International Crisis Behavior database, which contains detailed information about political crises around the world, we assess whether political crises affect stock market integration for 19 emerging markets from Far East Asia, Latin America and Eastern Europe. We find that crises and their characteristics significantly reduce the level of stock market integration for these regions. In particular, the start of a political crisis, its severity, US involvement in the conflict and the number of actors involved in the crisis all have a significant impact on the level of stock market integration for the emerging markets in each region.
Keywords: Stock Market Integration, International Crises, Emerging Markets
JEL Classification: F36, G15
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
By Justin Wolfers and Eric Zitzewitz
-
By Justin Wolfers and Eric Zitzewitz
-
What Do Financial Markets Think of War in Iraq?
By Andrew Leigh, Justin Wolfers, ...
-
What Do Financial Markets Think of War in Iraq?
By Andrew Leigh, Justin Wolfers, ...
-
Interpreting Prediction Market Prices as Probabilities
By Justin Wolfers and Eric Zitzewitz
-
Interpreting Prediction Market Prices as Probabilities
By Justin Wolfers and Eric Zitzewitz
-
Interpreting Prediction Market Prices as Probabilities
By Justin Wolfers and Eric Zitzewitz
-
Did Steve Forbes Scare the Municipal Bond Market?
By Joel B. Slemrod and Timothy Greimel
-
Partisan Impacts on the Economy: Evidence from Prediction Markets and Close Elections
By Erik C. Snowberg, Justin Wolfers, ...