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The consequences of online information dissemination on stock market liquidity and efficiency: Implications on African markets

Chipo Mlambo and Nicholas Biekpe

MPRA Paper from University Library of Munich, Germany

Abstract: From the Efficient Market Hypothesis, a market is efficient if security prices fully and correctly reflect all available information that is relevant for the stock’s pricing. This requires a medium of information dissemination and transaction ordering with both speed and accuracy. This paper chronologically presents arguments in favour of the internet as one such medium. The internet has also enabled the transmission and archiving of bulky information in a ready-to-use format. And abnormal returns are now quickly observed and arbitraged away to non-existence. Using correlation analysis, we find a positive relationship between the internet and some stock market development indicators.

Keywords: Efficient market hypothesis; internet; online information; stock market; development indicators; Africa (search for similar items in EconPapers)
JEL-codes: G14 O16 O33 (search for similar items in EconPapers)
Date: 2003-10, Revised 2003-11
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Published in African Finance Journal 2.5(2003): pp. 44-62

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