Understanding Crime, Political Uncertainty and Stock Market Returns

Juan Carlos Franco Laverde, Maria Estela Varua and Arlene Locsin Garces-Ozanne

World Economics, 2009, vol. 10, issue 2, pages 109-116

Abstract: Colombia’s economy has experienced positive growth over the past few years despite the incidence of serious armed conflict in the region. However, the Colombia of today still faces a significant degree of sociopolitical instability as a result of organised crime associated with drug trafficking, the leftist guerrilla attacks and the right-wing paramilitary group. This paper examines the significance of organised crime and political uncertainty for the amalgamated Colombian Stock Exchange. Empirical evidence indicates that organised crime and political uncertainty negatively affect stock market returns and volatility.

Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:wej:wldecn:378

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