MACROECONOMIC INSTABILITY, AGGREGATE FINANCIAL LIQUIDITY AND STOCK MARKET LIQUIDITY

Monday Uhunmwangho () and Eseoghene Joseph Idolor
Additional contact information
Monday Uhunmwangho: University of Benin, Benin City, Edo State, Nigeria
Eseoghene Joseph Idolor: University of Benin, Edo State, Nigeria

European Journal of Accounting, Finance & Business, 2022, vol. 10, issue 2, 10-17

Abstract: This study examined the effects of macroeconomic instability and aggregate liquidity on stock market liquidity. Macroeconomic instability constitutes risk for investments, whereas financial liquidity encourages trading at the exchange. The purpose of this study was to investigate the combined impact of macroeconomic instability and financial liquidity measured at the aggregate level on stock market liquidity in Africa. A cross-section of 16 African countries who are members of African Security Exchange Association (ASEA) were engaged for period from 2013 to 2019. The dynamic model and the Generalized Method of Moments (GMM) in first difference transformation regression technique constitute the methods. This study found that macroeconomic instability has positive and significant effect on market liquidity, while diaspora remittances negatively and significantly influenced it. Bank liquidity and aggregate money supply positively and significantly determined stock market liquidity. This study concluded that the challenge of stock market liquidity in Africa could be tackled through diaspora remittances, bank liquidity and money supply because they have the potential to reduce the cost of raising capital and stimulate trading activities at the exchange, thereby influencing stock market liquidity.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://accounting-management.ro/getpdf.php?paperid=29_2 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:scm:ejafbu:v:10:y:2022:i:2:p:10-17

Access Statistics for this article

European Journal of Accounting, Finance & Business is currently edited by Stefan cel Mare University of Suceava, West University of Timisoara

More articles in European Journal of Accounting, Finance & Business from "Stefan cel Mare" University of Suceava, Romania - Faculty of Economics and Public Administration, West University of Timisoara, Romania - Faculty of Economics and Business Administration Contact information at EDIRC.
Bibliographic data for series maintained by Liviu Scutariu ( this e-mail address is bad, please contact ).