Financial Development and the Sensitivity of Stock Markets to External Influences

Harris Dellas and Martin K. Hess ()
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Martin K. Hess: Studienzentrum Gerzensee and Universitaet Bern, http://www.szgerzensee.ch/

No 00.06, Working Papers from Swiss National Bank, Study Center Gerzensee

Abstract: We investigate how the relative contribution of external factors to stock price movements varies with the degree of financial development. We find that financial development makes stock markets more susceptible to external influences (both financial and macroeconomic). Interestingly, this effect is present even after having accounted for capital controls and international trade effects.

Keywords: Financial Development; Stock Markets; External Influences (search for similar items in EconPapers)
JEL-codes: F4 G1 O1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fin, nep-fmk and nep-ifn
Date: 2000-06-15
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Related works:
Working Paper: Financial Development and the Sensitivity of Stock Markets to External Influences (2001)
Journal Article: Financial Development and the Sensitivity of Stock Markets to External Influences (2002)
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