The effect of institutional quality on the relationship between corruption control and stock market development in selected countries
Subject Areas : Financial Markets and Institutions
1 - Department of Accounting, Abarkouh Branch, Islamic Azad University, Abarkouh, Iran.
Keywords: corruption control, stock market development, institutional quality, foreign exchange rate,
Abstract :
There are two views regarding the tendency of governments towards financial development. In the first view, governments support credit sectors and facilitate the access of manufacturing companies to financial resources by proper supervision in financial markets. The second point of view, the political point of view, that governments, by pursuing their goals, lead to an increase in expenses, ultimately causing a decline in financial development indicators.According to this subject, the present research has investigated the factors affecting the development of the stock market with an emphasis on the corruption control and the institutional quality. The current research is practical in terms of purpose. Also, this research is included in the descriptive-analytical research group. The data is collected in a library method. The level of analysis is the selected countries. For analysing data, the panel data method was used in STATA software. The results of estimating model by using the practical generalized least squares method have shown that the corruption control and the institutional quality have a positive and significant effect on the development of the stock market and the institutional quality moderates the relationship between the corruption control and the development of the stock market. So that with the improvement of institutional quality, the effect of the corruption control on stock market development is strengthened. Also, per capita income has a positive and significant effect on the development of the stock market, while the effect of the foreign exchange rate on the development of the stock market is not significant.
