Using the aggregate index, we find evidence that institutional quality is positively linked to growth. We investigate the growth effects of institutional quality and instability, using the political risk index from the ICRG in a cross-country study of 132 countries, measuring instability as the coefficient of variation. But to improve institutional quality, a country must endure a period of institutional change, which implies at least a little and possibly a lot of institutional instability. Our study brings into question the efficacy and economic sense of local market short-sale restrictions for stocks that trade globally.īoth institutional quality and institutional stability have been argued to stimulate economic growth. Further, ADR short sellers are able to predict negative returns regardless of the severity of the home-market short-sale constraints and that return predictability of ADR short sellers is greater for ADRs of foreign stocks with binding home-market constraints. We also find that when short sellers trade these short-sale restricted ADRs, they behave in a contrarian manner consistent with them being able to exploit and profit from private information. short sellers more heavily trade ADRs from markets where short selling is prohibited than from markets where short selling is allowed. We focus on the case of ADRs traded in the U.S., as in some cases, the home markets of these ADRs prohibit short selling. We examine the effect of home market short-sale constraints on stocks that also trade in other countries that have more liberal short-sale rules. Consequently, the study recommends an electoral reform which prioritises a six-year single tenure system in Nigeria. Thus, while the economic base of the metropolitan states and the local elite are expanding, the citizens are at the receiving end of this unfair arrangement. It diverts huge public spending from human and capital development to the procurement of election logistical materials usually sourced from the industrialised states. Using the Marxist Instrumentalist framework of analysis, documentary data and content analysis, this study argues that the electoral timetable of a four-year fixed-term of office for elected officers only serves the economic interests of the local bourgeoisies and their foreign collaborators. This study therefore provides an empirical analysis of how election cost in Nigeria’s fourth republic undermines expected development returns. While comparative studies on these relationships in both established and fledgling democracies have produced differential results, the link between electoral cost and economic development in transitional states is under-studied. The popular thinking in western scholarship projects progressive deepening of liberal democratic principles and praxis as the panacea for economic prosperity in the peripheral socio-economic formation. Particularly, there is a threshold level of democracy, estimated at 5, beyond which more democracy enhances the financial sector development and below which democracy hinders the development of the financial system. Hence, there are two extreme regimes where democracy’s impact on the financial system is different depending on the democracy level. Furthermore, results demonstrate that the level of democracy and financial system development are correlated in a U-shaped manner. Findings confirm the fact that the relationship between democracy and financial development is indeed non-linear. We use a sample of 90 developing countries over the period 1984–2007 and rely on panel smooth threshold regression, fixed effects, and system GMM models. This paper tries to bring new insights into this debate by examining non-linearities by the way of a new method of analysis, i.e., a panel smooth transition regression model. Part of the literature explains theses controversies by assuming that democracy’s effect on development is non-linear. There is evidence for mixed effects of democracy on the development of the financial sector.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |