The Determinants of Stock Market Development in the MENA Region

24 Pages Posted: 28 Nov 2005

See all articles by Sami Ben Naceur

Sami Ben Naceur

International Monetary Fund (IMF)

Samir Ghazouani

Higher School of Statistics and Information Analysis (ESSAI)

Mohammed Omran

The Insurance Holding Company; Arab Academy for Science and Technology

Date Written: August 31, 2005

Abstract

Since few decades, a wide theoretical debate is concerned with the fundamental relationship between financial development and economic growth. An efficient financial system leads to a sustainable economic growth. In this study, we are interested especially with stock markets as a main component of the financial system according to the increasing role of financial markets in economies. So, their evolution plays an important role in economic growth. We shed some light on the macroeconomic determinants which must have an important influence on stock markets development. It is recognized that real or financial variables such as real income, saving rate, credit to private sector, M3, value traded, turnover, etc. could have a significant impact on market capitalization. The empirical study is conducted using an unbalanced panel data from twelve MENA region countries. Econometric issues are based on estimation of some fixed and random effects specifications. With such specifications in mind, peculiarities of MENA region countries are detected as well as differentiations among them. Thus, differences in market capitalization are explained. The empirical expected results must reinforce the idea which suggest the important role of economic development in promoting stock market development. Explaining power of variables such as real income, saving rate, inflation, financial intermediary development and stock market liquidity is confirmed. Banks and stock markets seem to be complements instead of substitutes.

Keywords: stock market development, fixed effects model, random effects model, MENA region

Suggested Citation

Ben Naceur, Sami and Ghazouani, Samir and Omran, Mohammed M., The Determinants of Stock Market Development in the MENA Region (August 31, 2005). Available at SSRN: https://ssrn.com/abstract=856385 or http://dx.doi.org/10.2139/ssrn.856385

Sami Ben Naceur (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Samir Ghazouani

Higher School of Statistics and Information Analysis (ESSAI) ( email )

6, Rue des métiers
Charguia II, 2035
Tunisia
+216 70 839 440 (Phone)
+216 70 838 170 (Fax)

Mohammed M. Omran

The Insurance Holding Company ( email )

7 Talet Herb Street
Cairo
Egypt

Arab Academy for Science and Technology ( email )

P.O. Box. 1029
College of Management and Technology
Miami, Alexandria
Egypt
(203) 5482 532 (Phone)
(203) 5566 072 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
623
Abstract Views
2,385
rank
47,946
PlumX Metrics