How is financial stability impacted by political and economic stabilities in emerging markets? A dynamic panel analysis

ERTUĞRUL H. M., Ozun A., Kirikkaleli D.

Romanian Journal of Economic Forecasting, cilt.22, sa.4, ss.148-159, 2019 (SSCI) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 22 Sayı: 4
  • Basım Tarihi: 2019
  • Dergi Adı: Romanian Journal of Economic Forecasting
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.148-159
  • Anahtar Kelimeler: BRICT countries, Dynamic panel data analysis, Economic stability, Financial stability, Political stability
  • Anadolu Üniversitesi Adresli: Hayır

Özet

In this paper, we investigate the impacts of political and economic stability on financial stability in the BRICT countries, namely Brazil, Russia, India, China and Turkey, by using dynamic cross-sectional analysis based on quarterly panel data sets. In the present study, we mainly employ the common correlated effects group mean (CCEGM) model, which adds a dynamic nature to panel data analysis. The empirical results show that there is a strong effect from political risk and economic deterioration towards financial stability. We discuss the policy implications of the findings for the emerging markets. Additionally, the applied methodology allows us to produce empirical findings for each country, thus facilitating country-specific discussions.