IDEAS home Printed from https://ideas.repec.org/a/ibn/ijefaa/v13y2021i2p84.html
   My bibliography  Save this article

Analysis of the Need for Stock Market in Ethiopia

Author

Listed:
  • Haileberhan Zena

Abstract

Private sector participation and performance in the Ethiopian economy is weak. This is due to insufficient access of financial resources to the private sector. The credit market in the country has been overwhelmingly dominated by state-owned banks whose lending efforts have been dedicated to expanding public infrastructure projects and state owned enterprises as a matter of policy. The current government reform initiative by the name ‘Home-grown Economic Reform’ is expected to bring some adjustments in the financial system so that the private sector can have better choice for its long term investment needs with the introduction of market-based financial access. This study employed desk review of secondary data with content analysis of appropriate conceptual and empirical literature. Analysis of establishing stock market as a major alternative to bank based system is conducted using two models- business growth life cycle model and the financial structure model. The models are thought to explain the potential contribution of the development of equity market as a complement to the credit market in the financial structure of the country given the early stage of growth of the economy. The findings shown that establishing and developing stock market is strongly recommended to complement bank services and as an alternative financial access system both to investors and entrepreneurs. Issues to be considered in the process of establishing a stock market are provided as a way forward.

Suggested Citation

  • Haileberhan Zena, 2021. "Analysis of the Need for Stock Market in Ethiopia," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(2), pages 1-84, February.
    • Handle: RePEc:ibn:ijefaa:v:13:y:2021:i:2:p:84
    as

    Download full text from publisher

    File URL: http://www.ccsenet.org/journal/index.php/ijef/article/download/0/0/44730/47266
    Download Restriction: no
    File URL: http://www.ccsenet.org/journal/index.php/ijef/article/view/0/44730
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:idb:brikps:59498 is not listed on IDEAS
    2. Augusto de la Torre & Sergio L. Schmukler, 2007. "Emerging Capital Markets and Globalization : The Latin American Experience," World Bank Publications - Books, The World Bank Group, number 7187, December.
    3. Popov, Alexander, 2017. "Evidence on finance and economic growth," Working Paper Series 2115, European Central Bank.
    4. Jean Tirole, 2006. "The Theory of Corporate Finance," Post-Print hal-00173191, HAL.
    5. Augusto de la Torre & Sergio L. Schmukler, 2007. "Emerging Capital Markets and Globalization : The Latin American Experience," World Bank Publications, The World Bank, number 7187, September.
    6. Ake Boubakari & Dehuan Jin, 2010. "The Role of Stock Market Development in Economic Growth: Evidence from Some Euronext Countries," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 1(1), pages 14-20, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Endo, Tadashi, 2022. "Endogenous market development for government securities in lower-income economies," Emerging Markets Review, Elsevier, vol. 50(C).
    2. Alma Hales, 2015. "Liquidity and price discovery in Latin America: evidence from American depositary receipts," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 39(4), pages 661-678, October.
    3. de la Torre, Augusto & Didier, Tatiana & Pinat, Magali, 2014. "Can Latin America tap the globalization upside ?," Policy Research Working Paper Series 6837, The World Bank.
    4. Bank for International Settlements, 2019. "Establishing viable capital markets," CGFS Papers, Bank for International Settlements, number 62, december.
    5. Ahmed, Abdullahi D. & Mmolainyane, Kelesego K., 2014. "Financial integration, capital market development and economic performance: Empirical evidence from Botswana," Economic Modelling, Elsevier, vol. 42(C), pages 1-14.
    6. Peter Ego Ayunku, 2018. "The Nexus between Financial Sector Development and Economic Growth in Nigeria: A Cointergration Approach," Noble International Journal of Social Sciences Research, Noble Academic Publsiher, vol. 3(8), pages 55-70, August.
    7. Chiriboga-Tejada, Andrés, 2018. "A tale of two cities: the regional dimension of the Ecuadorian securities market," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 19(3), pages 25-35.
    8. Gary A. Dymski, 2010. "Three Futures for Postcrisis Banking in the Americas: The Financial Trilemma and the Wall Street Complex," Economics Working Paper Archive wp_604, Levy Economics Institute.
    9. Belcic-Stefan Iulia-Oana, 2015. "The Road Of Romania From Frontier Towards Emerging Capital Market Status," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 155-163, August.
    10. Hales, Alma D. & Mollick, André V., 2014. "The impact of ADR activity on stock market liquidity: Evidence from Latin America," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(3), pages 417-427.
    11. Bofelo Warona Mokgadi & Simangaliso Biza-Khupe, 2018. "An Empirical Investigation of the Relationship Between Pension Fund Reforms and Financial Sector Development in Botswana," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 7(2), pages 1-3.
    12. Okoroafor O.K David & Yelwa Mohammed, 2016. "The Perceived Relations between Development Reforms, Stock Market Performance and Economic Growth in Nigeria: 1984-2014," Economy, Asian Online Journal Publishing Group, vol. 3(1), pages 31-39.
    13. Endo, Tadashi, 2008. "Broadening the offering choice of corporate bonds in emerging markets : cost-effective access to debt capital," Policy Research Working Paper Series 4655, The World Bank.
    14. Li, Yuanyuan & Wigniolle, Bertrand, 2017. "Endogenous information revelation in a competitive credit market and credit crunch," Journal of Mathematical Economics, Elsevier, vol. 68(C), pages 127-141.
    15. Mikel Bedayo & Gabriel Jiménez & José-Luis Peydró & Raquel Vegas, 2020. "Screening and Loan Origination Time: Lending Standards, Loan Defaults and Bank Failures," Working Papers 1215, Barcelona School of Economics.
    16. Michiel Bijlsma & Wouter Elsenburg & Michiel van Leuvensteijn, 2010. "Four Futures for Finance; A scenario study," CPB Document 211.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    17. Won-Kyu Lim & Cheong-Kyu Park, 2022. "Mandating Gender Diversity and the Value Relevance of Sustainable Development Disclosure," Sustainability, MDPI, vol. 14(12), pages 1-12, June.
    18. Hitoshi Matsushima, 2018. "Bank Runs and Minimum Reciprocity," CIRJE F-Series CIRJE-F-1099, CIRJE, Faculty of Economics, University of Tokyo.
    19. Enikolopov, Ruben & Petrova, Maria & Stepanov, Sergey, 2014. "Firm value in crisis: Effects of firm-level transparency and country-level institutions," Journal of Banking & Finance, Elsevier, vol. 46(C), pages 72-84.
    20. Kirschenmann, K., 2010. "The Dynamics in Requested and Granted Loan Terms when Bank and Borrower Interact Repeatedly," Other publications TiSEM 40d5005c-1626-4511-aa8a-f, Tilburg University, School of Economics and Management.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibn:ijefaa:v:13:y:2021:i:2:p:84. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.