Financial Markets and Genetic Variation
Texas Tech University
University of California, Riverside (UCR) - Department of Finance and Management Science
University of Arizona
October 7, 2015
We investigate the extent to which a deep-rooted characteristic of a country – its degree of genetic variation determined by migratory movements of ancient ancestors across the globe – contributes to the observed variation in financial markets across countries. Using data from almost 100 countries, our cross-sectional analysis reveals a significant hump-shaped relation between the predicted genetic variation of a country and the size of a country’s financial markets. Our results are robust to different proxy measures of financial market size, several regression specifications, as well as the inclusion of a broad range of controls that have previously been shown to impact financial markets including: various cultural measures, legal origin, institutional characteristics, natural endowment, and trade openness. Our results regarding the relation between predicted genetic variation and financial market size appear to be restricted specifically to equity markets, as we do not find a statistically significant relation between predicted genetic various and various measures for debt market size of a country.
Number of Pages in PDF File: 55
Keywords: financial markets, genetic variation, culture
JEL Classification: G1, G2, O1, O4, O5
Date posted: March 16, 2014 ; Last revised: October 13, 2015
© 2015 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo6 in 0.422 seconds