What the study found
The study found that six Latin American financial markets showed resilient short-term behavior after political corruption scandals and recovered quickly from these shocks.
Why the authors say this matters
The authors say this resilience may reflect a socio-cultural context that allows corruption to continue without major consequences for market stakeholders. They also state that failure to react to corruption events can weaken long-term economic and political sustainability and may allow corrupt governments to stay in power and anti-corruption reforms to go unimplemented.
What the researchers tested
The researchers analyzed the impact of political corruption scandals on six Latin American financial markets from 2017 to 2020. They used a standard short-term event study and examined sensitivity through abnormal spread changes (ASC) and cumulative abnormal spread changes (CASCs) in credit default swaps (CDS) and the Emerging Markets Bond Index (EMBI).
What worked and what didn't
The markets appeared resilient and digested corruption episodes quickly in the short term. The abstract does not report specific markets that reacted differently, nor does it describe cases where the markets failed to recover.
What to keep in mind
The summary provided here reports only the abstract’s short-term findings and does not include detailed limitations or study-design caveats. The authors’ broader comments about corruption, sustainability, and reform are stated as implications in the abstract.
Key points
- Six Latin American financial markets were studied over 2017 to 2020.
- The analysis focused on political corruption scandals and short-term market reactions.
- The researchers used an event study with abnormal spread changes and cumulative abnormal spread changes.
- Credit default swaps and the Emerging Markets Bond Index were the financial measures examined.
- The abstract says the markets were resilient and recovered quickly in the short term.
Disclosure
- Research title:
- Latin American markets showed resilience after corruption scandals
- Publication date:
- 2026-02-27
- OpenAlex record:
- View
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