Political Risk on Financial Markets in Developed and Developing Economies

Aim/purpose - We want to draw academics and market practitioners attention to threats form political risk's area that affect national financial markets in both developed and developing economies. Design/methodology/approach - We analyzed the wide concept of political risk on the basis of international literature as well as national statistical data and international comparative indicants for selected developed and developing economies around the world. Findings - Growing significance of political risk was signaled, although both types of economies are exposed to different aspects of the threat. We confirmed that developing states are threatened by bigger number of political bothers, whereas advanced countries are susceptible to some forms of violence. Research implications/limitations - Imply that economies with better economic stance have lower level of political risk, although, their highly developed and integrated financial markets are responsible for the transfer of analyzed risk. Unfortunately, the scarcity of reliable time series about political risk hampered a deeper empirical analysis. Originality/value/contribution - Presentation of political threats to financial market stability