ABSTRACT

The objective of this study is to examine the relationship between macroeconomic stability, transparency in government, and anti-monopoly policies on the development of financial markets. The current study is based on a panel data set of 15 countries for the period 2005- 2020. The study has employ panel regression model i-e fixed, random effect; the controlling variables of this study are market size, per capita GDP and trade openness. Results reveal that fiscal sector has a weak impact on macroeconomic stability this happen in countries where; financial development is lower than the threshold. In specification of model, transparency has a significant effect that is statistically demonstrate. More competition and technical advancement consider as the effective source for possible accessibility for financial services. Long-term macroeconomic stability and financial market development are facilitated by effective transparency policies. Additionally, the study discovers that anti-monopoly laws are set to reduce bureaucratic power and corruption to boost confidence of investors towards financial markets in the short term. However, in the long run, a higher level of competitiveness is more susceptible to information asymmetry and unfavorable selection.