Poverty Reduction and Stock Market Development: Evidence from Africa

Pakistan Journal of Humanities and Social Sciences July – September 2018, Volume 6, No. 3, Pages 338 – 356

19 Pages Posted: 8 Aug 2019

See all articles by Bamanga Umar

Bamanga Umar

Modibbo Adama University of Technology - Department of Banking and Finance

Sabri Nayan

Universiti Utara Malaysia - School of Economics, Finance and Banking

Date Written: August 5, 2019

Abstract

Despite the increased number of stock exchanges in Africa, this segment of the financial market remains underdeveloped with low market capitalization, volume and illiquidity. Furthermore, the aftershock of the 2008 financial crisis exacerbates the poor market condition with the attendant decrease in investment. Efforts of previous policies to promote stock market development and restore investors’ confidence did not yield a positive outcome as they are yet to meet the rising demand for capital needed by domestic firms. This paper examines the relationship between poverty reduction and stock market development in Africa, using the pooled mean group (PMG) model for the sample period of 1996 to 2016. The findings suggest poverty reduction has a positive effect on stock market development both in the long-run and short-run estimates. For policy prescription, the government of the respective countries should implement programs that will promote financial inclusion and alleviate poverty to promote domestic investment in stock markets in the region.

Keywords: Africa, Financial market, PMG model, Poverty reduction, Stock market development

JEL Classification: G12, G21, G32, E43

Suggested Citation

Umar, Bamanga and Nayan, Sabri, Poverty Reduction and Stock Market Development: Evidence from Africa (August 5, 2019). Pakistan Journal of Humanities and Social Sciences July – September 2018, Volume 6, No. 3, Pages 338 – 356, Available at SSRN: https://ssrn.com/abstract=3432405

Bamanga Umar (Contact Author)

Modibbo Adama University of Technology - Department of Banking and Finance ( email )

Nigeria

Sabri Nayan

Universiti Utara Malaysia - School of Economics, Finance and Banking ( email )

Sintok, Sintok 06010
Malaysia

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
33
Abstract Views
242
PlumX Metrics