African Stock Market Performance Dynamics: A Multidimensional Convergence Assessment
Journal of African Business, 14(3), pp. 186–201, (2013).
41 Pages Posted: 10 Sep 2014 Last revised: 1 Apr 2015
Date Written: January 8, 2012
This paper dissects with great acuteness, the issues of convergence in financial performance dynamics in the African continent through the lenses of stock market capitalization, value traded, turnover and number of listed companies. The empirical evidence is premised on 11 homogenous panels based on regions (sub-Saharan and North Africa), income-levels (Low, Middle, Lower-middle and Upper-middle), legal-origins (English common-law and French civil-law) and religious dominations (Christianity and Islam). Findings provide partial support for the existence of absolute convergence in some dynamics. Only sub-Saharan Africa reveals conditional convergence in relation to per capita number of listed companies. The speed of convergence for the most part is between 12% and 28% per annum. As a policy implication, countries should work towards adopting common institutional and structural characteristics that favor stock market development.
Keywords: Convergence; Stock markets; Panel; Africa
JEL Classification: F30; G10; G20; O16; P50
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