Stock Markent Development and Economic Growth: African Emerging Makent Countries and Policy Implictions for TANZANIA
- Stock Markent Development and Economic Growth: African Emerging Makent Countries and Policy Implictions for TANZANIA
- MWAMBENE, Tuntufye
- Issue Date
- KDI School of public policy and management
- The paper studies the relationship between levels of stock market development and
economic growth in emerging market African countries. In this study I used panel data
(cross-sectional time-series) from 1991 to 2011 for 15 African emerging market countries.
Fixed effects regression model is applied to determine whether stock market development
level is significantly and positively correlated with the levels of economic growth. The paper
finds out that in the short-run there is a significant and positive correlation between stock
market development indicators and economic growth in African emerging market countries.
Only stock market liquidity is found to be significant and positively correlated with long-run
economic growth. This paper has many policy implications for emerging market countries in
Africa. Stock market development can be used as a means to reduce income inequality by
distributing ownership of State Owned Enterprises among individuals through equity shares;
African countries can promote stock markets to enable companies to expand so as to
contribute to the national revenue and improve standard of living through quality products
and job creation.
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