Political Crises and Risk of Financial Contagion in Developing Countries: Evidence from Africa

Published in: Journal of Economics and International Finance, 3(7), pp. 462-467 (2011, July).

14 Pages Posted: 9 Sep 2014 Last revised: 1 Apr 2015

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Date Written: April 3, 2011

Abstract

The recent waves of political crises in Africa and the Middle East have inspired the debate over how political instability could pose a risk of financial contagion to emerging countries. With retrospect to the Kenyan political crisis, our findings suggest stock markets in Lebanon, Mauritius were contaminated while Nigeria experienced a positive spillover. Our results have two major implications. Firstly, we have confirmed existing consensus that African financial markets are increasingly integrated. Secondly, we have also shown that international financial market transmissions not only occur during financial crisis; political crises effects should not be undermined.

Keywords: Political crisis; Contagion; Developing countries; Equity Markets

JEL Classification: G10; G15; F30

Suggested Citation

Asongu, Simplice, Political Crises and Risk of Financial Contagion in Developing Countries: Evidence from Africa (April 3, 2011). Published in: Journal of Economics and International Finance, 3(7), pp. 462-467 (2011, July). . Available at SSRN: https://ssrn.com/abstract=2493091 or http://dx.doi.org/10.2139/ssrn.2493091

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

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