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What drives financial market growth in Africa?

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  • Emmanuel, Ongo Nkoa Bruno
  • Thierry, Mamadou Asngar
  • Christian, Atangana Zambo Charles
  • Ludé, Djam'Angai

Abstract

This paper studies the determinants of financial market growth in 41 African countries during the period 1996–2017. Using the International Monetary Fund's Financial Markets Index, the results obtained from the generalized system method of moments reveal that gross domestic product per capita, foreign direct investment, domestic credit to the private sector, interest rate, natural resource rents, information and communication technology, and human capital have a positive and significant effect on financial market growth in Africa, while the level of investment, savings rate, trade openness, and the consumer price index are significant but negative. Moreover, additional results reveal that the effect of these determinants depends on the subregion in which the financial markets are located. Based on these results, we propose that African country leaders take into account specific subregional conditions to foster the growth of their financial markets.

Suggested Citation

  • Emmanuel, Ongo Nkoa Bruno & Thierry, Mamadou Asngar & Christian, Atangana Zambo Charles & Ludé, Djam'Angai, 2024. "What drives financial market growth in Africa?," International Review of Financial Analysis, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:finana:v:91:y:2024:i:c:s1057521923005069
    DOI: 10.1016/j.irfa.2023.102990
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