scholarly journals Impact of Oil Prices on Stock Market Development in Selected Oil Exporting Sub-Saharan African Countries

e-Finanse ◽  
2020 ◽  
Vol 16 (2) ◽  
pp. 1-13
Author(s):  
Adewale T. Muritala ◽  
Adeniyi M. Ijaiya ◽  
Ahmed O. Adekunle ◽  
Ibraheem K. Nageri ◽  
A. Bolaji Yinus
Keyword(s):  
Stock Market ◽  
Exchange Rates ◽  
Oil Prices ◽  
Market Development ◽  
African Countries ◽  
Stock Market Development ◽  
Dynamic Panel Model ◽  
Panel Model ◽  
Corruption Index ◽  
Sub Saharan

Abstract This study examines the dynamic impacts of oil prices on stock market development in four oil exporting sub-Saharan African countries in the period of 1989-2015. The Arbitrage Pricing Theory (APT) is used as the theoretical framework where stock market prices are hypothesized to be fully reflective of all available information. Static panel data (Pooled OLS, panel Fixed Effect Model, panel Random Effect Model) and dynamic panel model of Generalized Method of Moments (GMM) were employed in the estimation. The estimation of the static panel model shows that oil prices, exchange rates, gross domestic product, inflation and the corruption index have a positive and significant impact on stock market development. However, there is a slight improvement from the estimation of the GMM dynamic panel model which confirmed that oil prices, exchange rates, gross domestic product, investment, inflation and the corruption index have a positive and significant impact on stock market development. The study therefore recommends that investors in selected the Sub-Sahara Africa (SSA) stock market need to be cognizant of the varying impacts of macroeconomic indicators, particularly those that have been found to exert strong influence on stock returns like oil prices, exchange rates, inflation and the corruption index.

scholarly journals The Finance Growth Link: Comparative Analysis Of Two Eastern African Countries

2016 ◽  
Vol 19 (3) ◽  
pp. 147-167 ◽  
Author(s):  
Ashenafi Beyene Fanta ◽  
Daniel Makina
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Financial Development ◽  
Low Income ◽  
Structural Breaks ◽  
Response Analysis ◽  
African Countries ◽  
Vector Autoregressive ◽  
Stock Market Development ◽  
Sub Saharan

This paper examines the finance growth link of two low-income Sub-Saharan African economies – Ethiopia and Kenya – which have different financial systems but are located in the same region. Unlike previous studies, we account for the role of non-bank financial intermediaries and formally model the effect of structural breaks caused by policy and market-induced economic events. We used the Vector Autoregressive model (VAR), conducted impulse response analysis and examined variance decomposition. We find that neither the level of financial intermediary development nor the level of stock market development explains economic growth in Kenya. For Ethiopia, which has no stock market, intermediary development is found to be driven by economic growth. Three important inferences can be made from these findings. First, the often reported positive link between finance and growth might be caused by the aggregation of countries at different stages of economic growth and financial development. Second, country-specific economic situations  and episodes are important in studying the relationship between financial development and economic growth. Third, there is the possibility that the econometric model employed to test the finance growth link plays a role in the empirical result, as we note that prior studies did not introduce control variables.

scholarly journals Enabling stock market development in Africa: A review of the macroeconomic drivers

2021 ◽  
Vol 18 (1) ◽  
pp. 357-364
Author(s):  
Paul Uzum ◽  
Ailemen Ochei Ikpefan ◽  
Alexander Ehimare Omankhanlen ◽  
Jeremiah Ogaga Ejemeyovwi ◽  
Benjamin Ighodalo Ehikioya
Keyword(s):  
Stock Market ◽  
Private Sector ◽  
Stock Markets ◽  
Trade Openness ◽  
Market Development ◽  
External Trade ◽  
African Countries ◽  
Stock Market Development ◽  
Access To Credit ◽  
Per Capita

Africa has underdeveloped stock markets that have failed to meet the continent’s capital needs, such as rapid economic growth. This research analyzes the key drivers of stock market development in Africa from a macroeconomic perspective. The study examines several macroeconomic variables, including credit to the private sector, foreign direct investment, external reserves, money supply, external trade, per capita GDP, inflation, and lending rate to explain stock market development in Africa. The study builds a panel data consisting of eight African countries from 1994 to 2018 and applies the pooled mean group estimation technique. The analysis shows that in the long run, credit to the private sector, external reserves, and inflation are the most important factors that influence stock market development, while in the short run, income and trade openness are significant in explaining stock market development in Africa. The study recommends that policies to develop African stock markets should center on developing the private sector through access to credit, increased per capita income, and effective foreign reserve management to boost local and foreign investors’ confidence.

The impact of oil prices on stock market development in Pakistan: Evidence with a novel dynamic simulated ARDL approach

2020 ◽  
pp. 101899
Author(s):  
Muhammad Imran Khan ◽  
Jian-Zhou Teng ◽  
Muhammad Kamran Khan ◽  
Arshad Ullah Jadoon ◽  
Muhammad Fayaz Khan
Keyword(s):  
Stock Market ◽  
Oil Prices ◽  
Market Development ◽  
Stock Market Development ◽  
Ardl Approach ◽  
The Impact
Sign in / Sign up

Export Citation Format

Share Document