Financial Literacy Without Voice? Female Political Empowerment and Stock Market Development in Developing Countries

The financial literacy literature generally assumes that individual financial knowledge naturally translates into capital market development. However, this process often fails in developing economies, where institutional and structural barriers limit women’s participation in formal financial markets. This study proposes a novel Capability–Influence–Opportunity (CIO) framework, arguing that female financial literacy creates investment capability, female political representation removes structural barriers, and governance quality provides the institutional conditions for market participation. Using panel data from 92 developing economies (2014–2024), we find that female financial literacy promotes stock market development, but its impact is strongest only when combined with high female political representation and strong governance. The findings demonstrate that unlocking women’s financial human capital is essential for broadening the investor base and fostering sustainable capital market development.