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The determinants of stock market development in the Middle-Eastern and North African region


  • Samy Ben Naceur
  • Samir Ghazouani
  • Mohamed Omran


Purpose - The purpose of this study is to investigate the role of stock markets in economic growth and to shed some light on the macroeconomic determinants which must have an important influence on stock markets development. Design/methodology/approach - The empirical study is conducted using an unbalanced panel data from 12 Middle Eastern and North African (MENA) region countries. Econometric issues are based on estimation of some fixed and random effects specifications. Findings - It is found that saving rate, financial intermediary, stock market liquidity and the stabilization variable are the important determinants of stock market development. In addition, it is found that financial intermediaries and stock markets are complements rather than substitutes in the growth process. Practical implications - This paper has some policy implications to MENA region countries. In order to promote stock market development in the region, it is important to encourage savings by appropriate incentives, to improve stock market liquidity, to develop financial intermediaries and to control inflation. Originality/value - Since it is unclear whether emerging markets in the MENA region respond, similarly, to economic and political shocks like other emerging markets and/or developed markets. This paper fills this gap by making an in-depth analysis of 12 MENA capital markets in order to assess how they can improve their capital markets, and hence, benefit the global investor.

Suggested Citation

  • Samy Ben Naceur & Samir Ghazouani & Mohamed Omran, 2007. "The determinants of stock market development in the Middle-Eastern and North African region," Managerial Finance, Emerald Group Publishing, vol. 33(7), pages 477-489, June.
  • Handle: RePEc:eme:mfipps:v:33:y:2007:i:7:p:477-489

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