Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
6481254 | Research in International Business and Finance | 2017 | 10 Pages |
The fall of communism in Eastern Europe is a historical event which had political, social and economic repercussions worldwide. Our research examines the association between stock market development and the way that left/right-wing power was exercised. Our results show that this historical event was a game changer! Up until the fall of the communist bloc in 1991, the power of the left was negatively associated with stock market development, however over the post-fall period this association becomes positive. Additionally, our findings also show that the left/right-wing conflict is only determinant in the case of emerging economies, which may be explained by the fact that these countries are less-developed institutionally and economically, and thus provide more scope for political preferences to overcome institutions.