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Institutional changes, wars and stock market risk in an emerging economy: evidence from the Israeli stock exchange, 1945–1960

Author

Listed:
  • Raphaël Franck

    (Department of Economics, Bar Ilan University, 52900 Ramat Gan, Israel)

  • Miriam Krausz

    (Department of Economics, Bar Ilan University, 52900 Ramat Gan, Israel)

Abstract

In an effort to understand the determinants of economic growth in an emerging economy, we analyze the effects of institutional reforms, wars and political events on the risk level of the Israeli stock market between 1945 and 1960. We find that the anticipation of wars did not have any effect but the end of skirmishes actually raised the risk on the stock market. Domestic political instability also increased the stock market risk. Finally we find that most legal reforms did not matter much.

Suggested Citation

  • Raphaël Franck & Miriam Krausz, 2009. "Institutional changes, wars and stock market risk in an emerging economy: evidence from the Israeli stock exchange, 1945–1960," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 3(2), pages 141-164, June.
    • Handle: RePEc:afc:cliome:v:3:y:2009:i:2:p:141-164
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    Citations

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    Cited by:

    1. Pandey, Dharen Kumar & Lucey, Brian M. & Kumar, Satish, 2023. "Border disputes, conflicts, war, and financial markets research: A systematic review," Research in International Business and Finance, Elsevier, vol. 65(C).
    2. Hanedar, Avni Önder & Hanedar, Elmas Yaldız, 2017. "Ottoman stock returns during the Turco-Italian and Balkan Wars of 1910-1914," eabh Papers 17-02, The European Association for Banking and Financial History (EABH).
    3. Hanedar, Avni Önder & Hanedar, Elmas Yaldız, 2017. "Ottoman stock returns during the Turco-Italian and Balkan Wars of 1910-1914," eabh Papers 17-02, The European Association for Banking and Financial History (EABH).
    4. Hanedar, Avni Önder & Yaldız Hanedar, Elmas, 2017. "Stock market reactions to wars and political risks: A cliometric perspective for a falling empire," MPRA Paper 85600, University Library of Munich, Germany, revised 25 Mar 2018.

    More about this item

    Keywords

    Institutions; Emerging economy; Stock marke; War;
    All these keywords.

    JEL classification:

    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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