Does Cryptocurrency Hurt African Firms?

Sami, M. and Abdallah, W. (2022) . "Does Cryptocurrency Hurt African Firms?". Forthcoming Risks, MDPI.

30 Pages Posted: 4 Mar 2022

See all articles by Mina Sami

Mina Sami

The American University in Cairo

Wael Abdallah

The American University in Cairo

Date Written: February 18, 2022

Abstract

This paper aims to assess the effect of the cryptocurrency market on the firms' market value, especially on the sectoral level in Africa. To reach the study's main goal, the authors adopted the Panel Corrected Standard Errors (PCSE) and Panel Double Clustered Standard Errors (PDCSE). Using firm-level data, the results of this study can be summarized as follows: (a) Cryptocurrency market hurts the firm market value in Africa. (b) The firms operating across different sectors respond disproportionally to the cryptocurrency market. For instance, the sectors that offer low returns in Africa (Industrials, Energy, Financials) negatively respond to the cryptocurrency market. While the sectors that offer high returns (Real Estate and Information Technology) are not significantly affected. (c) The cryptocurrency market has a perverse effect on less experienced and highly indebted firms. (d) The consistent policies of governments to ban cryptocurrency did not work efficiently.

Keywords: Africa, Cryptocurrency, Bitcoin, Firms

JEL Classification: B26, G11, G32

Suggested Citation

Sami, Mina and Abdallah, Wael, Does Cryptocurrency Hurt African Firms? (February 18, 2022). Sami, M. and Abdallah, W. (2022) . "Does Cryptocurrency Hurt African Firms?". Forthcoming Risks, MDPI., Available at SSRN: https://ssrn.com/abstract=4038109 or http://dx.doi.org/10.2139/ssrn.4038109

Mina Sami (Contact Author)

The American University in Cairo ( email )

AUC Avenue - P.O. Box 74
Cairo
Egypt

HOME PAGE: http://https://www.aucegypt.edu/fac/minaayad

Wael Abdallah

The American University in Cairo ( email )

AUC Avenue - P.O. Box 74
Cairo
Egypt

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