Influence of corruption factors on the development of the Asian stock market

The stock market plays a significant role in corporate finance. However, the stock market movement was largely influenced by some external factors, such as economic, psychological and political factors. Using a sample of 10 Asian countries, this study aims to study the impact of macroeconomic and corruption factors on the development of the stock market. The dependent variable used in this study was the development of the stock market. While the variables of interest used in this study were 1) income level, 2) savings, 3) foreign direct investment, 4) value of traded shares, 5) money supply and 6) corruption perception index. When checking the relationship between variables due to the nature of the data, a panel-based approach was applied. As expected, gross domestic savings, foreign direct investment and money supply were largely associated with the development of the stock market. On the other hand, the level of income, as it turned out, has a significant negative relationship with the development of the stock market. It is noteworthy that the results also showed that a decrease in the level of corruption can lead to an increase in the development of the stock market. Thus, changing the level of corruption is an important issue that needs to be considered before making any investment decision, since the level of corruption has a significant impact on the development of the stock market.