Stock Performance and Political (In)stability in OIC countries: An Empirical Evidence

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Kais Abd Alkafage , Sabri Nayan , Sabariah Nordin


Amongst the major concerns of the Organization of Islamic Countries (OIC) is frequent political unrest inherent in the region. Using available data from the World Governance and Development Indicators, between 2006 and 2019, this study analyses the impacts of political instability on stock market performance in eleven OIC countries. In modelling the relationship between these variables, this study employs the Regression with Driscoll-Kraay standard errors, after observing the presence of heteroscedasticity and autocorrelation in the traditional panel techniques. The empirical findings established the existence of a positive nexus between political instability and stock market performance in the examined OIC countries. Furthermore, the control variables of the study (i.e., economic growth and exchange rate) showed evidence of positive relationships with stock market performance.


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