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Interest Rate Liberalization, Quality institutions and Stock Market Development in Selected Sub-Saharan African Countries

Author

Listed:
  • Wakilat Olabisi Balogun

    (Universiti Utara Malaysia, School of Economics Finance & Banking, Malaysia)

  • Jauhari B. Dahalan

    (Universiti Utara Malaysia, School of Economics Finance & Banking, Malaysia)

  • Sallahuddin B. Hassan

    (Universiti Utara Malaysia, School of Economics Finance & Banking, Malaysia)

Abstract
The paper examines the long run effects of interest rate liberalization and institutional quality on the development of stock market in seven selected subSaharan African (SSA) countries using panel dataset that spans 1990-2013. The study employs dynamic heterogeneous panel method using the technique of pooled mean group. The results reveal that on the average liberalizing the interest rates has a negative long run impact on the development of the stock markets in the seven selected SSA economies. Institutional quality on the other hand has significant positive relationship with the development of stock market. The policy recommendation as a result of this finding is that liberalization of interest rates in the SSA region should be a guided one.

Suggested Citation

  • Wakilat Olabisi Balogun & Jauhari B. Dahalan & Sallahuddin B. Hassan, 2016. "Interest Rate Liberalization, Quality institutions and Stock Market Development in Selected Sub-Saharan African Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 6(2), pages 786-792.
    • Handle: RePEc:eco:journ1:2016-02-56
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    References listed on IDEAS

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    Cited by:

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    3. Hichem Saidi, 2020. "Threshold effect of institutions on finance-growth nexus in MENA region: New evidence from panel simultaneous equation model," Economics Bulletin, AccessEcon, vol. 40(1), pages 699-715.

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    More about this item

    Keywords

    Interest Rate; Institutional Quality; Stock Market Development;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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