Effects of financial liberalization on stock market development, FDI inflows and TFP in selected African countries

Under the International Monetary Fund and World Bank structural adjustment reform programs, liberalization was introduced to the developing countries as a means of growing these economies. However, two decades after liberalization, empirical findings of some of the liberalized countries in Sub-Saha...

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id my-uum-etd.6150
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Dahalan, Jauhari
Hassan, Sallahuddin
topic HG Finance
spellingShingle HG Finance
Olabisi, Balogun Wakilat
Effects of financial liberalization on stock market development, FDI inflows and TFP in selected African countries
description Under the International Monetary Fund and World Bank structural adjustment reform programs, liberalization was introduced to the developing countries as a means of growing these economies. However, two decades after liberalization, empirical findings of some of the liberalized countries in Sub-Saharan African (SSA) countries show mix results. The study sets out to investigate the long run influence of financial liberalization on stock market development, foreign direct investment (FDI), and total factor productivity (TFP) for seven selected SSA countries for the period 1990-2013. The study employs dynamic panel data analysis to investigate for the influence of liberalization on stock market development, FDI and productivity in the seven selected SSA countries. The techniques of Pooled Mean Group (PMG) and the Mean Group (MG) are employed to determine possible long run relationships among the variables. The direction and effects of liberalization on stock market and FDI, and the effects of these FDI inflows on productivity change is crucial for the development of the nascent economies of the SSA. Findings validate the positive significant impact of stock market liberalization on the development of stock market. Liberalized interest rate however has a long run negative influence on development of stock market although it has a positive effect on FDI. The study thus recommends that the individual SSA economies should set up market-friendly financial policy that would further boost the contribution of liberalization to their economies. More efforts should be made to improve the state of poor institutions in order to enhance FDI in the selected SSA nations in order for foreign investment to have sustained impact on productivity. Steps should be taken to encourage the local citizens to invest in stock market so as to reduce the overbearing influences of foreigners in the stock market.
format Thesis
qualification_name other
author Olabisi, Balogun Wakilat
author_facet Olabisi, Balogun Wakilat
author_sort Olabisi, Balogun Wakilat
title Effects of financial liberalization on stock market development, FDI inflows and TFP in selected African countries
title_short Effects of financial liberalization on stock market development, FDI inflows and TFP in selected African countries
title_full Effects of financial liberalization on stock market development, FDI inflows and TFP in selected African countries
title_fullStr Effects of financial liberalization on stock market development, FDI inflows and TFP in selected African countries
title_full_unstemmed Effects of financial liberalization on stock market development, FDI inflows and TFP in selected African countries
title_sort effects of financial liberalization on stock market development, fdi inflows and tfp in selected african countries
granting_institution Universiti Utara Malaysia
granting_department School of Economics, Finance & Banking
publishDate 2016
url https://etd.uum.edu.my/6150/1/s95716_01.pdf
https://etd.uum.edu.my/6150/2/s95716_02.pdf
_version_ 1747828028577153024
spelling my-uum-etd.61502021-04-19T06:22:11Z Effects of financial liberalization on stock market development, FDI inflows and TFP in selected African countries 2016 Olabisi, Balogun Wakilat Dahalan, Jauhari Hassan, Sallahuddin School of Economics, Finance & Banking School of Economics, Finance and Banking HG Finance Under the International Monetary Fund and World Bank structural adjustment reform programs, liberalization was introduced to the developing countries as a means of growing these economies. However, two decades after liberalization, empirical findings of some of the liberalized countries in Sub-Saharan African (SSA) countries show mix results. The study sets out to investigate the long run influence of financial liberalization on stock market development, foreign direct investment (FDI), and total factor productivity (TFP) for seven selected SSA countries for the period 1990-2013. The study employs dynamic panel data analysis to investigate for the influence of liberalization on stock market development, FDI and productivity in the seven selected SSA countries. The techniques of Pooled Mean Group (PMG) and the Mean Group (MG) are employed to determine possible long run relationships among the variables. The direction and effects of liberalization on stock market and FDI, and the effects of these FDI inflows on productivity change is crucial for the development of the nascent economies of the SSA. Findings validate the positive significant impact of stock market liberalization on the development of stock market. Liberalized interest rate however has a long run negative influence on development of stock market although it has a positive effect on FDI. The study thus recommends that the individual SSA economies should set up market-friendly financial policy that would further boost the contribution of liberalization to their economies. More efforts should be made to improve the state of poor institutions in order to enhance FDI in the selected SSA nations in order for foreign investment to have sustained impact on productivity. Steps should be taken to encourage the local citizens to invest in stock market so as to reduce the overbearing influences of foreigners in the stock market. 2016 Thesis https://etd.uum.edu.my/6150/ https://etd.uum.edu.my/6150/1/s95716_01.pdf text eng public https://etd.uum.edu.my/6150/2/s95716_02.pdf text eng public other Universiti Utara Malaysia Abdullah, N. (1997). Measurement of Total Factor Productivity for the Malaysian Rice Sector. IIUM Journal of Economics and Management, 5(2), 67-75. Abu, N., Abd Karim, M. Z., & Aziz, M. I. A. (2015). Corruption, political instability and economic development in the Economic Community of West African States (ECOWAS): Is there a causal relationship?. Contemporary Economics, 9(1), 45-60. Acemoglu, D. (2003). Root causes. 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