Economic freedom, equity performance and market volatility

Purpose - The purpose of this paper is to investigate the relationships between the Index of Economic Freedom, equity market performance and its volatility. Design/methodology/approach - The paper examines whether the level of economic freedom is significant for a country's stock market performance and volatiling. Findings - Regression results show that adjusted stock returns bear little relationship with economic freedom. On the other hand, economic freedom is associated with lower stock market volatility. Originality/value - The results imply that a country with greater economic freedom provides investors with better mean-variance investment efficiency.