This paper explores the relationship between stock market development and economic growth in
Africa. It provides a theoretical basis for establishing the channel through which stock market
affect economic growth and this is empirically examined by using regression analysis to test if
indeed there is such a relationship. Three stock market indicators, namely market capitalization
as a percentage of GDP, turnover ratio and numbers of listed shares, are used to test whether
they have any impact on economic growth, together with other explanatory variables of growth
such as foreign direct investment, inflation and credit. The study uses data on four countries:
Kenya, Nigeria, Egypt and South Africa for the period 1991-2010. Furthermore, the study
investigated whether a collaborative regional cross-listing will improve the stock market
development of the country of secondary listing. Dummy variables and interactive variables are
used in regressions to test for collaborative relationships between the exchanges in the region.
The results show that indeed there is an association between stock market development and
economic growth. Results also show that cross-listing within a region can boost stock market
development, which in turn boosts economic growth. Africa does not have a lot of cross-listings
but from this paper, the evidence suggests that it is a path worth exploring.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:wits/oai:wiredspace.wits.ac.za:10539/12465 |
| Date | 21 February 2013 |
| Creators | Letlape, Bontle Virginia |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | application/pdf |
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