The Role Of Capital Markets Development In Economic Growth and Risk Management: The Case of Selected African Development Bank Member Countries
Coulibaly, Chigata 2015. The Role Of Capital Markets Development In Economic Growth and Risk Management: The Case of Selected African Development Bank Member Countries. Masters Thesis University of East London Royal Docks Business School
2015 dissertation for MSc Finance and Risk. Selected by academic staff as a good example of a masters level dissertation.
Purpose - The aim of this dissertation is to examine the role of capital markets development in the economic health of the African development Bank (AFDB) regional and non regional member countries. Also to evaluate how the stock market indexes located in those countries manage their market risk and volatility. This paper combines various econometric models for a thorough analysis.
Methodologies/Approaches - This study uses time series and panel data designs to find out whether the stock market development influences economic growth, explaining the exact nature of this relationship. It also uses delta-normal Value at Risk and GARCH (1, 1) approaches in order to the stock indexes risk and volatility.
Results - The finding shows the evidence of finance-led growth in most countries (with the exception of United Kingdom and Cote d'Ivoire) since there are one or several significant variables. Therefore we accepted the null hypothesis for these two countries and rejected for the eight the other countries. Nevertheless, the results have highlighted the significance of Market capitalization (size proxy) and turnover ratio (liquidity proxy) to the economic growth in most cases. The risk and volatility tests conclude that Japan, Brazil, South Africa, Egypt and UK have the most volatile and riskiest stock indexes.
Recommendations - The key role of African governments is to create suitable environments by establishing efficient and flexible regulations to motivate foreign investments, prioritising domestic awareness about financial services and creating a stable political climate to make investments possible.
Value/Originality - This dissertation performs an array of econometric models on two African markets' major concerns.
|11 May 2015|
|Publication process dates|
|Deposited||22 Jun 2015|
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