| Popis: |
The relationship between institutional quality, financial development, and economic growth has been well documented in the literature. However, much less work has been done the effect of judicial independence (JI) on financial market development (FM) in particular. This paper fills that gap using the JI score and FM in the context of 23 emerging markets (as identified by the Financial Times Stock Exchange Group) over the period 1980–2021. Overall, the results suggest that, in selected emerging markets JI fosters FM. Interestingly, the results across various quantiles of JI show that low JI hampers FM, but a medium and high level of JI boosts FM in these markets. These results are robust to several specifications. To the best of our knowledge, this is the first study to examine the direct impact of JI on FM and confirms the theories on new institutional economics as well as law and finance in emerging markets. |
