Frank Obenpong Kwabi
Political uncertainty and stock market liquidity, size, and transaction cost: The role of institutional quality
Kwabi, Frank Obenpong; Adegbite, Emmanuel; Ezeani, Ernest; Wonu, Chizindu; Mumbi, Henry
Authors
EMMANUEL ADEGBITE EMMANUEL.ADEGBITE@NOTTINGHAM.AC.UK
Professor in Accounting and Corporate Governance
Ernest Ezeani
Chizindu Wonu
Henry Mumbi
Abstract
Using panel data of 42 countries from 2001 to 2019, we examine whether political uncertainty (caused by uncertainty about national elections) explains variations in cross-country liquidity, market size, and transaction cost. We also investigate whether institutional quality moderates the negative effects of political uncertainty on stock market development. We show that political uncertainty reduces stock market size, liquidity, and increases transaction costs. Our results indicate that institutional quality moderates the negative effects of political uncertainty on stock market development. However, we find no effects in emerging markets arising from the high prevalence of weak institutions. We confirm the robustness of our findings using alternative financial development measures and endogeneity. This study enhances our understanding of the salient role of political uncertainty in the development of the stock market, with important implications for market regulators, corporations, and investors.
Citation
Kwabi, F. . O., Adegbite, E., Ezeani, E., Wonu, C., & Mumbi, H. (2024). Political uncertainty and stock market liquidity, size, and transaction cost: The role of institutional quality. International Journal of Finance and Economics, 29(2), 2030-2048. https://doi.org/10.1002/ijfe.2760
Journal Article Type | Article |
---|---|
Acceptance Date | Dec 17, 2022 |
Online Publication Date | Jan 9, 2023 |
Publication Date | 2024-04 |
Deposit Date | Dec 21, 2022 |
Publicly Available Date | Jan 10, 2025 |
Journal | International Journal of Finance and Economics |
Print ISSN | 1076-9307 |
Electronic ISSN | 1099-1158 |
Publisher | Wiley |
Peer Reviewed | Peer Reviewed |
Volume | 29 |
Issue | 2 |
Pages | 2030-2048 |
DOI | https://doi.org/10.1002/ijfe.2760 |
Keywords | Institutional quality; political uncertainty; stock market development |
Public URL | https://nottingham-repository.worktribe.com/output/15166242 |
Publisher URL | https://onlinelibrary.wiley.com/doi/full/10.1002/ijfe.2760 |
Files
Int J Fin Econ - 2023 - Obenpong Kwabi - Political uncertainty and stock market liquidity size and transaction cost The
(1.2 Mb)
PDF
Publisher Licence URL
https://creativecommons.org/licenses/by-nc-nd/4.0/
Copyright Statement
© 2023 The Authors. International Journal of Finance & Economics published by John Wiley & Sons Ltd.
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.
You might also like
The influence of multinational enterprises on subsidiaries: context matters
(2018)
Journal Article
Corporate governance and elites
(2017)
Journal Article
Biases in international portfolio allocation and investor protection standards
(2017)
Journal Article
Downloadable Citations
About Repository@Nottingham
Administrator e-mail: discovery-access-systems@nottingham.ac.uk
This application uses the following open-source libraries:
SheetJS Community Edition
Apache License Version 2.0 (http://www.apache.org/licenses/)
PDF.js
Apache License Version 2.0 (http://www.apache.org/licenses/)
Font Awesome
SIL OFL 1.1 (http://scripts.sil.org/OFL)
MIT License (http://opensource.org/licenses/mit-license.html)
CC BY 3.0 ( http://creativecommons.org/licenses/by/3.0/)
Powered by Worktribe © 2024
Advanced Search