Do stock markets matter in investment growth in Africa?

Charles Adjasi and Nicholas Biekpe

Journal of Developing Areas, 2009, vol. 43, issue 1, 109-120

Abstract: The paper investigates the effect of stock market prices on investment growth using dynamic panel data analysis of selected African countries. In line with theoretical expectations investment responds positively to increases in stock prices. Further analysis based on interaction terms reveals that the sensitivity of investment to stock prices increases with stock market development. The paper also finds that even without the inclusion of the most sophisticated market-South Africa, the positive relationship between investment and stock market prices continues to exist in the smaller markets. The findings underscore the importance of stock markets to investment formation in Africa.

Keywords: Stock market returns; investment-growth; dynamic panel; Africa (search for similar items in EconPapers)
JEL-codes: E22 G10 O55 (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://muse.jhu.edu/journals/journal_of_developing_areas/v043/43.1.adjasi.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:jda:journl:vol.43:year:2009:issue1:pp:109-120

Access Statistics for this article

More articles in Journal of Developing Areas from Tennessee State University, College of Business Contact information at EDIRC.
Bibliographic data for series maintained by Abu N.M. Wahid ().