ISSN: 1998 - 4162

JISR MSSE Journal Contents

Volume 16, Number 2, July 2018


Nexus of Institutional Quality and Stock Market Development: Long-Run Relationships in Dynamic Heterogeneous Panel
Muhammad Saeed Meo - , Karachi, Pakistan
Ramzan Ali - , Karachi, Pakistan


Abstract
The current study is intended to analyze the relationship between stock market development and institutional quality. The study is based on the evidence of VISTA alliance for the period of 1984 to 2012. The outcomes of the panel ARDL (PMG) revealed that high regulatory quality, government effectiveness and rule of law, positively affect stock market development in the long-run. While political stability and control over corrupt practices have a significantly negative effect on stock market development. This study provides robust evidence that institutional quality plays a critical role in stock market development in any economy. However, governments should motivate employees to work with motivation by giving rewards, so that corrupt practices can be reduced.

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