Macroeconomic factors and stock market development in sub-Saharan Africa: does the measure of stock market development matter?
Transnational Corporations Review
We examine the impact of macroeconomic factors on stock market development in sub-Saharan Africa.... more We examine the impact of macroeconomic factors on stock market development in sub-Saharan Africa. More specifically, we examine the sensitivity of the impact of macroeconomic factors on stock market development to the choice of measure of stock market development. We apply the Feasible Generalised Least Squares (FGLS) estimator on a panel dataset of 12 countries over the period 2000-2015. The empirical results indicate that income, trade openness, financial openness, macroeconomic instability, financial intermediary development, savings, and investment influence stock market development. We provide evidence to suggest that the impact of macroeconomic factors on stock market development is sensitive to the choice of measure of stock market development. The implication of our findings is that the multidimensionality of stock market development should not be jettisoned in making policy prescriptions for stock market development in sub-Saharan Africa.
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Papers by Adewale Aluko
principal function of the financial sector is the movement of financial resources between different units in an economy
through the process of financial intermediation. An economy suffers if the financial sector is not efficient. An efficient
financial sector can only exist when development occurs in the financial sector. However, the supply-leading
hypothesis assumes that financial development is the driver of economic growth. Thus this study inquires into
whether the supply-leading hypothesis can be upheld in a developing economy, with particular reference to
the Nigerian economic growth between 1981 and 2013. Using the Granger Pairwise causality test, it reveals that
there is weak evidence in support of supply-leading hypothesis; rather, the demand-following hypothesis is dominant
in the economy. However, the study suggests that there is bi-directional causality between financial development
variables and indices of economic growth which thus confirms the existence of their interdependence in Nigeria
context.
development on real sector productivity in the 21st century. The model adapts the financial
sector development measures used in King and Levine (1993) as predictors of industrial sector
production output. Estimating the model with Ordinary Least Square (OLS) method, the study
reveals that there is a strong linear relationship between the financial sector and real sector
because the coefficient of multiple determinations is relatively high; thus suggesting that
financial sector development is crucial for real sector productivity.
Keywords: Financial Sector, Real Sector, Real Sector Productivity, Financial Sector
Development, Nigerian Industrial Sector
The study examines the effect of globalisation on the economic performance of developing nations with particular reference to Nigeria. The study employs the Ordinary Least Square (OLS) method to analyze the model adopted, in which Gross Domestic Product is used as a proxy to measure economic performance, and depends on the degree of openness, exchange rate, and foreign direct investment which are indices of globalisation. Annual time series data were collected from the Central Bank of Nigeria (CBN) Statistical Bulletin from 1980 to 2010. The study revealed that globalisation has a significant positive impact on the economic performance/growth of Nigeria. It recommends that the government should continually ensure a business-friendly environment to encourage foreign participation in investment. Also, the government should stimulate local production and diversify the nation’s export base.
Keywords: Globalisation, Economic Performance, Ordinary Least Square, Gross Domestic Product, Nigeria