Institutional Determinants of Stock Market Development in European Union Transition Economies

Abstract

Stock markets have become an important market for long run fund flows between savers and investors and also a determinant of economic growth with the emergence of endogenous growth theories. This study investigates the impact of institutional development on stock market development in 8 European Union transition economies during 2002-2013 period employing panel regression. We found that political stability, regulatory quality, rule of law and control of corruption had positive impact on stock market development.

Keywords

• Institutional determinants
• stock market development
• panel data analysis.