Political Crises and Risk of Financial Contagion in Developing Countries: Evidence from Africa

Simplice Asongu

No 11/003, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

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 G10 G15 (search for similar items in EconPapers)
Pages: 14
Date: 2011-04-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in the Journal of Economics and International Finance

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http://www.afridev.org/RePEc/agd/agd-wpaper/Politi ... ancial-contagion.pdf Revised version, 2013 (application/pdf)

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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