Government Quality Determinants of Stock Market Performance in African Countries

Simplice Asongu

No 11/019, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

Abstract: How do government policies and institutions affect stock market performance? As stock markets grow broader and deeper in African countries, the question becomes more critical. Government quality dynamics of corruption-control, government-effectiveness, political-stability or no violence, voice & accountability, regulation quality and rule of law are instrumented with income-levels, religious-dominations, press-freedom degrees and legal-origins to account for stock market performance dynamics of capitalization, value traded, turnover and number of listed companies. The results demonstrate a significant positive association between stock market performance measures and the quality of government institutions. These findings suggest countries with better developed government institutions would favor stock markets with higher market capitalization, better turnover ratios, higher value in shares traded and greater number of listed companies.

Keywords: Financial Markets; Government Policy; Political Economy (search for similar items in EconPapers)
JEL-codes: G10 G18 G28 P16 P43 (search for similar items in EconPapers)
Pages: 40
Date: 2011-12-20
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Published in The Journal of African Business

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http://www.afridev.org/RePEc/agd/agd-wpaper/Govern ... frican-countries.pdf Revised version, 2013 (application/pdf)

Related works:
Working Paper: Government quality determinants of stock market performance in African countries (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:agd:wpaper:11/019

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