For trading domestically. The regression results for the ratio of domestic value
traded to market capitalization (Table 4) indicate that value traded is affected by the same
variables that drive stock market development in general. In particular, GDP per capita
positively affects trading. Inflation is not statistically significantly related to trading
activity in the basic regression, but is in one of the other regression results. Enforcement
of laws is also positively and statistically significant related to value traded. The indexes
of shareholder rights and capital account and financial liberalization are not statistically
significant related to value traded. Surprisingly also, trading costs do not seem to affect
domestic trading in a statistically significant way.