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The Effects of Financial and Political Risks on Economic Risk in Southern European Countries: A Dynamic Panel Analysis

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  • Dervis Kirikkaleli
  • Kelvin Onyibor

Abstract

In this study, we investigate the effects of financial and political risks on the economic risk in Southern European countries. Quarterly data were employed, covering the period from 2000/Q1 to 2015/Q4. We performed the Pedroni Cointegration, Westerlund Cointegration, Common Correlated Estimated Mean Group (CCEMG), and Dynamic Common Correlated Estimated Mean Group technique (dynamic CCEMG). Our empirical findings suggest that (i) an improved financial environment is associated with less economic risk in the Southern European countries; (ii) political risk is harmful to economic stability.

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  • Dervis Kirikkaleli & Kelvin Onyibor, 2020. "The Effects of Financial and Political Risks on Economic Risk in Southern European Countries: A Dynamic Panel Analysis," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(1), pages 381-393, January.
    • Handle: RePEc:jfr:ijfr11:v:11:y:2020:i:1:p:381-393
    DOI: 10.5430/ijfr.v11n1p381
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