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Government quality determinants of stock market performance in African countries

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  • Simplice A, Asongu

Abstract

How do government policies and institutions affect stock market performance? As stock markets grow broader and deeper in African countries, the question becomes more critical. Government quality dynamics of corruption-control, government-effectiveness, political-stability or no violence, voice & accountability, regulation quality and rule of law are instrumented with income-levels, religious-dominations, press-freedom degrees and legal-origins to account for stock market performance dynamics of capitalization, value traded, turnover and number of listed companies. The results demonstrate a significant positive association between stock market performance measures and the quality of government institutions. These findings suggest countries with better developed government institutions would favor stock markets with higher market capitalization, better turnover ratios, higher value in shares traded and greater number of listed companies.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39631.

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Date of creation: 23 Jun 2012
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Handle: RePEc:pra:mprapa:39631

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Keywords: Financial Markets; Government Policy; Political Economy;

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References

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  1. Asongu Simplice, 2011. "Law and Finance in Africa," Working Papers 11/009, African Governance and Development Institute..
  2. Simon Johnson & Andrei Shleifer, 1999. "Coase v. the Coasians," NBER Working Papers 7447, National Bureau of Economic Research, Inc.
  3. Asongu Simplice, 2011. "Why do French civil-law countries have higher levels of financial efficiency?," Working Papers 11/011, African Governance and Development Institute..
  4. Simplice A, Asongu, 2012. "Are Proposed African Monetary Unions Optimal Currency Areas? Real and Monetary Policy Convergence Analysis," MPRA Paper 36056, University Library of Munich, Germany.
  5. Julius A. Agbor, 2011. "How Does Colonial Origin Matter for Economic Performance in Sub-Saharan Africa?," Working Paper Series UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
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  8. Narayan, Paresh Kumar & Narayan, Seema & Smyth, Russell, 2011. "Does democracy facilitate economic growth or does economic growth facilitate democracy? An empirical study of Sub-Saharan Africa," Economic Modelling, Elsevier, vol. 28(3), pages 900-910, May.
  9. Simplice A. Asongu, 2013. "Real and monetary policy convergence: EMU crisis to the CFA zone," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 5(1), pages 20-38, February.
  10. Simplice A, Asongu, 2012. "African Stock Market Performance Dynamics: A Multidimensional Convergence Assessment," MPRA Paper 36055, University Library of Munich, Germany.
  11. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Agency Problems and Dividend Policies Around the World," Harvard Institute of Economic Research Working Papers 1839, Harvard - Institute of Economic Research.
  12. Simplice A., Asongu, 2011. "New financial intermediary development indicators for developing countries," MPRA Paper 30921, University Library of Munich, Germany.
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  14. Asongu Simplice, 2012. "African Financial Development Dynamics: Big Time Convergence," Working Papers 12/003, African Governance and Development Institute..
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  20. North, Douglass C, 1994. "Economic Performance through Time," American Economic Review, American Economic Association, vol. 84(3), pages 359-68, June.
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  22. Vaidya, Samarth, 2005. "Corruption in the media's gaze," European Journal of Political Economy, Elsevier, vol. 21(3), pages 667-687, September.
  23. Simplice A., Asongu, 2011. "Law, Finance and Investment: does legal origin matter?," MPRA Paper 34698, University Library of Munich, Germany.
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