Stock market capitalisation and economic growth: empirical evidence from Africa

Mohamed Jalloh

International Journal of Financial Markets and Derivatives, 2016, vol. 5, issue 1, 76-95

Abstract: In spite of the fact that financial markets play a significantly positive role in influencing the rate at which economies grow, the existing empirical evidences on the nexus between stock market capitalisation and economic growth remain mixed. This study, therefore, attempt to provide further evidence on the relationship between stock market capitalisation and economic growth using recent data from a sample of African countries with well-functioning stock markets. A dynamic panel approach is employed with a view to assessing the relative impact of stock market capitalisation on the economic growth in Africa. The results from the study show that enhancing stock market capitalisation by a marginal average of 10.0% induces growth by 5.4% in countries studied. The positive and significant relationship between stock market capitalisation and economic growth as demonstrated in this study provides encouraging signals for African countries to explore stock markets as a potential avenue for expediting economic growth. This, therefore, suggests the dire need for policymakers in Africa to direct efforts towards the implementation of policy measures that will encourage the development of stock markets to spur economic growth.

Keywords: stock market capitalisation; dynamic panel; economic growth; Africa; stock markets. (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=76991 (text/html)
Access to full text is restricted to subscribers.

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:ids:ijfmkd:v:5:y:2016:i:1:p:76-95

Access Statistics for this article

More articles in International Journal of Financial Markets and Derivatives from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().