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Corruption, Crime, Credit Rating, and Stock Market Development in Pakistan: An Analysis through ARDL Bounds Testing
Abstract
This study examines the relationship of corruption (CRPI), crime (CRMI), and credit rating (CR) with stock market development (SMD) of an emerging economy, using the secondary data for a period ranging from 1997Q1 through 2016Q4. The study employs robust ARDL bounds testing to cointegration and error correction model (ECM)for empirical analysis. Findings expose the existence of a negative and significant relationship between CRPI, CRMI, CR, and SMD. The negative and statistically significant coefficient of ECT also ratifies the cointegration estimation of bounds testing. The study contributes in existing literature by examining and reporting the association of some key factors with stock market development of an emerging Asian economy. Bases on results, the study offers certain policy implication and recommendations. It is suggested to control the rising level of corruption and crime in the country. Credit rating also needs proper monitoring and management. Such measures will be helpful in promoting the sustainable economic and financial development of the country
Authors
Dr. Muhammad Asif Khan
Assistant Professor, Department of Commerce, University of Kotli Azad Jammu and Kashmir, Pakistan
Dr. Ghulam Mujtaba Chaudhary
Assistant Professor, Department of Business Administration, University of Kotli Azad Jammu and Kashmir, Pakistan
Adeel Arshad
Lecturer, Department of Business Administration, University of Kotli Azad Jammu and Kashmir, Pakistan
Keywords
ARDL Bounds Testing, Corruption, Credit Rating, Crime, Stock Market Development
