scholarly journals The Link between Quality of Governance and Stock Market Performance: International Level Evidence

2017 ◽  
Vol 6 (1) ◽  
pp. 78 ◽  
Author(s):  
Isaac Boadi ◽  
Hayford Amegbe
Keyword(s):  
Stock Market ◽  
Market Performance ◽  
Political Stability ◽  
Fixed Effect Model ◽  
International Markets ◽  
Policy Implications ◽  
Stock Market Performance ◽  
Quality Of Governance ◽  
And Control

The present study investigates the link between quality of governance and stock market performance within the context of international markets. The study employed the Fixed Effect model using 23 countries with complete relevant data for the period spanning from 1996 to 2014. The study reveals that, quality of governance as captured by Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption significantly affect stock market performance. Varying effects are produced when the countries are decomposed into income classifications. What is more, the findings and suggestions of this study suggest that quality of government significantly affect foreign direct investment and could have interesting policy implications. The main value of this paper is to examine the link between quality of governance and stock market performance within the context of international markets.

scholarly journals Assessing the Nexus Between Stock Market Performance and Covid-19: Evidence from Global Perspective

2021 ◽  
Author(s):  
Yousaf Latif ◽  
Ge Shunqi ◽  
Shahid Bashir ◽  
wasim Iqbal ◽  
Salman Ali ◽  
...  
Keyword(s):  
Stock Market ◽  
Stock Exchange ◽  
Market Performance ◽  
Global Perspective ◽  
Policy Implications ◽  
Market Volatility ◽  
Gdp Growth ◽  
Stock Market Volatility ◽  
Public Attention ◽  
Stock Market Performance

Abstract This study described an empirical link between COVID-19 fear and stock market volatility. Studying COVID-19 fear with stock market volatility is crucial for planning adequate portfolio diversification in international financial markets. The study used AR (1) – GARCH (1,1) to measure stock market volatility associated with the COVID-19 pandemic. Our findings suggest that COVID-19 fear is the ultimate cause driving public attention and is a stock market volatility. The results demonstrate that stock market performance and GDP growth decreased significantly through average increases during the pandemic. Further, a 1% increase in COVID-19 cases the stock return and GDP decrease with a 0.8%, 0.56%, respectively. However, GDP growth demonstrated a slight movement with stock exchange. Moreover, public attention to the attitude of buying or selling was highly dependent on the COVID-19 pandemic reported cases index, death index, and global fear index. Consequently, investment in the gold market, rather than in the stock market, is recommended. The study also suggests policy implications for key stakeholders.

scholarly journals FDI Inflow, Stock Market Performance and Exchange Rate: Indian Scenario

2017 ◽  
Vol 7 (2) ◽  
pp. 148
Author(s):  
Kunal Kunal ◽  
B V Phani
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Foreign Exchange ◽  
Foreign Currency ◽  
Market Performance ◽  
Foreign Exchange Rate ◽  
Policy Implications ◽  
Sensitivity Index ◽  
Indian Economy ◽  
Stock Market Performance

In this research work, macro level analysis has been conducted to assess impact of foreign direct investment (FDI) capital inflow in Indian economy. This study is focused on causality relationship between FDI inflow, stock market performance and foreign exchange rate. This framework is used for policy implications of relationship between three variables. These macro-economic variables are linked with different policies. Causality tests performed on these variables are further used for policy implications. Impact of change in exchange rate on changes in FDI inflow is the least significant followed by impact of changes in FDI inflow on changes in sensitivity index of stock exchange (SENSEX). The third least significant relationship is observed between changes in FDI inflow on change in exchange rate. These relationships are implied to ‘Impossible Trinity’ framework to assess preference for monetary, fiscal and foreign exchange rate policies. It is observed that improving performance of stock market (SENSEX) should be on priority followed by exchange rate. These finding have implications on fiscal policy, monetary policy and exchange rate. The increase in return of stock market and favourable exchange rate will help in increasing FDI inflow in Indian economy. Stock market performance depends on daily transactions by investors and they are regulated only, not controlled. Supply of foreign currency in India is controlled by the Reserve Bank of India (RBI), who assesses the supply conditions of the market and attempts to manage exchange rate in favour of Indian economy. In other words, the exchange rate can be controlled by having control on supply of foreign currency in domestic market. Hence, there is possibility of having fixed exchange rate and target band of exchange rate.

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