Financial development and stock returns: A cross-country analysis

We examine stock returns in a cross section of emerging and mature markets (49 countries) over the period 1980–1999. Stock returns are found to be significantly related to the degree of financial development. In general, a deeper and higher quality banking system is associated with lower volatility...

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Veröffentlicht in:	Journal of international money and finance 2005-10, Vol.24 (6), p.891-912
Hauptverfasser:	Dellas, Harris, Hess, Martin
Format:	Artikel
Sprache:	eng
Schlagworte:	Banking industry Capital market Comparative analysis Cross-national analysis Economic development Emerging markets Empirical research Financial development International finance Manycountries Rates of return Regression analysis Securities markets Stock prices Stock returns Studies
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Beschreibung
Zusammenfassung:	We examine stock returns in a cross section of emerging and mature markets (49 countries) over the period 1980–1999. Stock returns are found to be significantly related to the degree of financial development. In general, a deeper and higher quality banking system is associated with lower volatility of stock returns and a greater synchronization in the movements of domestic and world returns. International synchronization is also greater the more liquid the stock market.
ISSN:	0261-5606 1873-0639
DOI:	10.1016/j.jimonfin.2005.07.002