Political Risk and Stock Market Development
This article examines empirically the relationship between political instability and stock market development in a small capital market (the Greek capital market). We measure socio-political instability by constructing an index which captures the occurrence of various phenomena of political violence. The empirical results indicate the existence of a strong negative relationship between uncertain socio-political conditions and the general index of the Athens Stock Exchange.
KeywordsPolitical risk Political instability Stock markets development Small capital markets
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