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Should Africa promote stock market capitalism?

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  • Singh, Ajit

Abstract

This paper considers the pros and cons of establishing stock markets in Sub-Saharan African economies at the present stage of their development. It provides theoretical analysis and empirical evidence from both developing and advanced countries to argue that for many African countries such a development would be a costly irrelevance which they can ill afford; for a number of others, it is likely to do more harm than good. The African countries would do better to use their scarce human, material, and institutional resources to improve their banking systems than to promote stock markets.

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  • Singh, Ajit, 1999. "Should Africa promote stock market capitalism?," MPRA Paper 54291, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:54291
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    References listed on IDEAS

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    9. Harris, Richard D. F., 1997. "Stock markets and development: A re-assessment," European Economic Review, Elsevier, vol. 41(1), pages 139-146, January.
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    12. Allen, Franklin & Gale, Douglas, 1995. "A welfare comparison of intermediaries and financial markets in Germany and the US," European Economic Review, Elsevier, vol. 39(2), pages 179-209, February.
    13. Cho, Yoon Je, 1989. "Finance and Development: The Korean Approach," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 5(4), pages 88-102, Winter.
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    19. Pagano, Marco, 1993. "Financial markets and growth: An overview," European Economic Review, Elsevier, vol. 37(2-3), pages 613-622, April.
    20. Ajit Singh, 1998. "Financial liberalisation, stockmarkets and economic development," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 8(1), pages 165-182.
    21. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    22. Corbett, Jennifer & Jenkinson, Tim, 1994. "The Financing of Industry, 1970-89: An International Comparison," CEPR Discussion Papers 948, C.E.P.R. Discussion Papers.
    23. Jean Tirole, 1991. "Privatization in Eastern Europe: Incentives and the Economics of Transition," NBER Chapters, in: NBER Macroeconomics Annual 1991, Volume 6, pages 221-268, National Bureau of Economic Research, Inc.
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    26. Mayer,Colin & Vives,Xavier (ed.), 1993. "Capital Markets and Financial Intermediation," Cambridge Books, Cambridge University Press, number 9780521443975, October.
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    More about this item

    Keywords

    Sub-Saharan Africa; banking systems; stock markets; empirical evidence; theory;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G2 - Financial Economics - - Financial Institutions and Services
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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