Corruption and Stock Market Development: New Evidence from GCC Countries | Zendy

Moaz Alsherfawi Aljazaerli | Zendy; Rasha Sirop | Zendy; Sulaiman Mouselli | Zendy

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Corruption and Stock Market Development: New Evidence from GCC Countries

Author(s) -

Moaz Alsherfawi Aljazaerli,

Rasha Sirop,

Sulaiman Mouselli

Publication year - 2016

Publication title -

verslas teorija ir praktika

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.369

H-Index - 17

eISSN - 1822-4202

pISSN - 1648-0627

DOI - 10.3846/btp.2016.555

Subject(s) - expediting , market capitalization , stock market , economics , language change , transparency (behavior) , capitalization , restricted stock , monetary economics , stock (firearms) , stock market bubble , business , political science , mechanical engineering , art , paleontology , linguistics , philosophy , literature , management , horse , law , biology , engineering

The theoretical relationship between corruption and stock market development has been debated quite extensively in the literature, yet the evidence on the impact of corruption on stock market development remains contradictory and ambiguous. This paper investigates the impact of corruption, as measured by Corruption Perception Index (CPI) published by Transparency International, on stock market development focusing exclusively on Gulf Cooperation Council (GCC) countries with its special characteristics of combining richness with relatively high level of corruption.\udResults from an estimation of alternative regression models on a panel of six GCC countries over the period 2003–2011, through which CPI is legitimately comparable, confirms a positive impact of corruption on stock market development, where the latter is measured by market capitalization. This is consistent with the view that corruption greases the wheels of economy by expediting transactions and allowing private firms to overcome governmentally imposed inefficiencies

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