How is Financial Stability Impacted by Political and Economic Stabilities in Emerging Markets? A Dynamic Panel Analysis

Hasan Ertugrul (), Alper Ozun () and Dervis Kirikkaleli
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Alper Ozun: Faculty of Law, University of Oxford, London, UK.

Journal for Economic Forecasting, 2019, issue 4, 148-159

Abstract: In this paper, we investigate the impacts of political and economic stability on financial stability in the BRICT countries, namely Brazil, Russia, India, China and Turkey, by using dynamic cross-sectional analysis based on quarterly panel data sets. In the present study, we mainly employ the common correlated effects group mean (CCEGM) model, which adds a dynamic nature to panel data analysis. The empirical results show that there is a strong effect from political risk and economic deterioration towards financial stability. We discuss the policy implications of the findings for the emerging markets. Additionally, the applied methodology allows us to produce empirical findings for each country, thus facilitating country-specific discussions.

Keywords: Financial stability; political stability; economic stability; dynamic panel data analysis; BRICT countries (search for similar items in EconPapers)
JEL-codes: C54 C58 G00 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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