Abstract

Corruption has a profound impact on many aspects of a society, such as, productivity growth, foreign direct investment or income equality. We propose that corruption also has an impact on stability of financial markets. In this study, we demonstrate a strong correlation between corruption and financial market stability and compare corruption with other social and economic factors in terms of their correlations with financial market stability. The data used in this study include financial data of 29 countries’ index funds for the last five years (2002–07), the Corruption Perception Index 2007 and the Index of Economic Freedom 2007. JEL Classification: D73, G15, G32

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.