Financial Deepening in South Africa: Toward and Architecture that Stimulates Growth

Ashley G. Frank ()
Additional contact information
Ashley G. Frank: University of KwaZulu-Natal

The African Finance Journal, 2007, vol. 9, issue 2, 26-36

Abstract: Theory suggests that financial liberalisation, through increasing investment as well as the average productivity of capital, stimulates economic growth. Since bank-based financial deepening is often problematic due to adverse selection and moral hazard effects, the establishment and expansion of capital markets has been advocated. This study examines the effect stock market expansion has had for South Africa’s economic development. A statistically significant negative relationship between stock market development and economic growth is found. The data suggests that the presence of thin trading prevents the theorized benefits of market development from accruing to the economy.

JEL-codes: E44 G21 (search for similar items in EconPapers)
Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.journals.co.za/ej/ejour_finj.html (text/html)

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:afj:journl:v:9:y:2007:i:2:p:26-36

Access Statistics for this article

More articles in The African Finance Journal from Africagrowth Institute Contact information at EDIRC.
Bibliographic data for series maintained by Kirk De Doncker ().