Unraveling the Link between Corruption and Stock Market Performance in the MENA Region: Insights from Panel ARDL Model. (Empirical study)

: Purpose: The primary purpose of this study undertaking is to investigate the relationship between corruption and financial market indicators across diverse groups of countries. Our goal is to scrutinize the potential effects of corruption on trading volumes, market capitalization, and trading ratios, while considering the influence of GDP and inflation. Through a thorough examination of both nations characterized by clean governance and those plagued by corruption, our research seeks to contribute to the understanding of how corruption impacts financial markets. Design/Methodology/Approach: Diverging from the predominant trend in previous studies that treated the MENA region as a collective dataset, our methodology involves classifying MENA countries into two distinct categories based on their corruption levels. We employ a quantitative approach using panel data that spans a diverse array of nations. Our analysis utilizes various econometric models, including random-effects and fixed-effects models (ARDL), to scrutinize the relevant relationships. To account for potential influences on observed outcomes, we integrate control variables, specifically inflation and GDP, into the models. Findings: Our findings demonstrate significant variations in the impact of corruption on financial market indicators across different country groups. Corruption exhibits negative associations with market capitalization, trading volumes, and positive association with trading ratios. Additionally, the control variables GDP and inflation contribute distinctively to these relationships. The results also highlight the significance of corruption as a determinant of financial market performance in both corrupt countries and clean countries. Originality/Value: This study adds significant value to the existing knowledge base by conducting a thorough investigation into the relationship between corruption and financial market indicators. Through the integration of diverse econometric methods and considering the moderating effects of GDP and inflation, our research offers a comprehensive insight into the