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Economic freedom, equity performance and market volatility

Carl R. Chen (Department of Economics and Finance, University of Dayton, Dayton, Ohio, USA)
Ying Sophie Huang (Department of Economics and Finance, Haile/US Bank College of Business, Northern Kentucky University, Highland Heights, Kentucky, USA)

International Journal of Accounting & Information Management

ISSN: 1834-7649

Article publication date: 23 October 2009

1138

Abstract

Purpose

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The purpose of this paper is to investigate the relationships between the Index of Economic Freedom, equity market performance and its volatility.

Design/methodology/approach

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The paper examines whether the level of economic freedom is significant for a country's stock market performance and volatiling.

Findings

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Regression results show that adjusted stock returns bear little relationship with economic freedom. On the other hand, economic freedom is associated with lower stock market volatility.

Originality/value

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The results imply that a country with greater economic freedom provides investors with better mean‐variance investment efficiency.

Keywords

Citation

Chen, C.R. and Sophie Huang, Y. (2009), "Economic freedom, equity performance and market volatility", International Journal of Accounting & Information Management, Vol. 17 No. 2, pp. 189-197. https://doi.org/10.1108/18347640911001221

Publisher

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Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited

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