Political crises and risk of financial contagion in developing countries: Evidence from Africa

Simplice Asongu

MPRA Paper from University Library of Munich, Germany

Abstract: The recent waves of political crises in Africa and the Middle East have inspired the debate over how political instability could pose a risk of financial contagion to emerging countries. With retrospect to the Kenyan political crisis, our findings suggest stock markets in Lebanon, Mauritius were contaminated while Nigeria experienced a positive spillover. Our results have two major implications. Firstly, we have confirmed existing consensus that African financial markets are increasingly integrated. Secondly, we have also shown that international financial market transmissions not only occur during financial crisis; political crises effects should not be undermined.

Keywords: Political crisis; contagion; developing countries; equity markets (search for similar items in EconPapers)
JEL-codes: F30 F50 G10 G15 O55 (search for similar items in EconPapers)
Date: 2011-07-01
New Economics Papers: this item is included in nep-afr and nep-pol
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Citations: View citations in EconPapers (11)

Published in Journal of Economics and International Finance 7.3(2011): pp. 462-467

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Related works:
Working Paper: Political Crises and Risk of Financial Contagion in Developing Countries: Evidence from Africa (2011)
Working Paper: Political Crises and Risk of Financial Contagion in Developing Countries: Evidence from Africa (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:37459

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