This study examines the impacts of democracy and political risk on stock market. Using annualized panel data for 49 emerging markets for 2000-2012 we find evidence that democracy and political risk do have impact on stock market returns and the relationship between democracy and political risk is parabolic i.e., there is a threshold level of democracy after which political risk begins to decline. Our also results suggest that decreases in political risk lead to higher returns.JEL classification: G15, G12, F52

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This study evaluates stock market integration between the USA, UK, Germany, Japan and Finland from the point of view of the international investor. Several definitions of convergence were employed all of which yielded a slightly different inference on integration. First, evidence on long-run stock price convergence suggested that the UK and German stock markets accommodate to changes in US stock prices, whereas the Finnish and Japanese stock markets are considered to be segmented. Second, evidence of convergence of excess returns indicated that due to expectations on exchange rate changes expected stock returns may overestimate the benefits from portfolio diversification. Third, regarding the actual changes in the exchange rate the UK, German, Japanese and Finnish stock returns converged towards the returns in the US market in an extent which suggests the importance of a covariance over the variance as a measure of risk.

Taxes have become an issue of corporate social responsibility (CSR), but the role of taxation is to some extent an ambiguous and controversial issue in the CSR framework. Similarly, another unclear question is what role investors who are committed to sustainable and responsible investment (SRI) see taxes as having on their environmental, social, and governance (ESG) agenda. Corporate taxes have an inverse relationship with the return of the investors: taxes paid directly affect what is left on the bottom line, reducing the return of investors. However, investors are now more aware of tax-related risks, which can include different forms of reputation risk. Corporate tax planning may increase the returns, but those increased returns are riskier. This study focuses particularly on the relationship between SRI and taxation. We find that tax matters are considered to be on the ESG agenda, but their role and significance in the ESG analysis is unclear.

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