IS CORRUPTION DETRIMENTAL FOR STOCK RETURNS? EVIDENCE FROM A PANEL OF LATIN AMERICAN FIRMS (2004-2013): A NOTE

Carlo Bellavite Pellegrini () and Raul Caruso ()

Rivista Internazionale di Scienze Sociali, 2017, vol. 125, issue 1, 3-12

Abstract: This paper empirically investigates the impact of national level of corruption on stock returns for a panel of listed firms in Latina America for the period 2004-2013. Two measures of corruption are used. Results are mixed. Only when considering a measure of public capacity in the control of corruption, coefficients exhibit statistically significant relationships. This can be considered a plausible indirect cost of corruption. In fact, if governance of economy loses flexibility in order to prevent corruption, it can also become detrimental for economic returns.

Keywords: Corruption; Stock Returns; Latin America. (search for similar items in EconPapers)
JEL-codes: D73 G10 G15 G3 (search for similar items in EconPapers)
Date: 2017
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