Corruption Perception, Institutional Quality and Stock Prices: Evidence from the Egyptian Capital Market | ||
| المجلة العلمية للدراسات التجارية والبيئية | ||
| Volume 16, Issue 1, January 2025, Pages 318-351 PDF (553.37 K) | ||
| Document Type: المقالة الأصلية | ||
| DOI: 10.21608/jces.2025.422165 | ||
| Authors | ||
| Rasha ElBolok* 1; Gina El-Tabei* 2; Dina Hassouna* 3 | ||
| 1Faculty of Commerce, Accounting Department, Suez Canal University, Ismailia, Egypt. Faculty of Business Administration, Economics, and Political Science, The British University in Egypt (BUE), El-Sherouk City, Egypt | ||
| 2Faculty of Business Administration, Economics, and Political Science, The British University in Egypt (BUE), El-Sherouk City, Egypt | ||
| 3, Faculty of Business Administration, Economics and Political science, The British University in Egypt (BUE), El-Sherouk City, Egypt. | ||
| Abstract | ||
| This study examines the impact of institutional quality and corruption perception on stock prices in the Egyptian capital market, with a focus on the post-revolution period from 2013 to 2022. Using the Generalized Method of Moments (GMM) methodology, this study provides empirical evidence on the significant role of macro-political factors and firm-specific variables in shaping stock market dynamics. The findings reveal that institutional quality, characterized by governance efficiency, regulatory frameworks, and the rule of law, positively correlates with stock prices. Similarly, enhanced corruption perception control significantly boosts investor confidence, leading to increased market valuations. Firm-level factors such as Tobin’s Q and firm age also show positive associations with stock prices, whereas foreign direct investment (FDI) and return on assets (ROA) exhibit negative effects. This study underscores the importance of robust institutional frameworks and anti-corruption perception to foster market stability and attract investment in emerging economies. This study contributes to the limited literature on the Middle East and North Africa (MENA) region, offering critical insights for policymakers, investors, and stakeholders. Future studies should explore these dynamics in other developing markets and during periods of significant institutional reforms. | ||
| Keywords | ||
| Corruption Perception; Institutional Quality; Egypt; Stock Prices | ||
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