Barriers to the Development of Small Stock Markets: A Case Study of Swaziland and Mozambique
Journal of International Development, Forthcoming
24 Pages Posted: 23 Aug 2008 Last revised: 20 May 2009
Date Written: August 20, 2008
Abstract
The establishment of a successful stock market in a developing economy can provide a major source of development finance both by channelling domestic savings and attracting foreign investment. However, this objective is not always met, particularly in very small markets. A case study of Swaziland and Mozambique illustrates that any potential gains to the domestic investment community are limited if the political economy does not allow the markets to develop sufficient liquidity. This paper finds that neither market is able to provide investors with risk diversification opportunities for portfolio investment.
Keywords: Sub-Saharan Africa, Swaziland, micro-markets, regional integration
JEL Classification: O16, O55
Suggested Citation: Suggested Citation
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