Foreign Direct Investments and Development of Stock Market Capitalization in Sub-Saharan Africa: An Empirical Investigation, 1984-2015.
Journal Title: IOSR journal of Business and Management - Year 2018, Vol 20, Issue 6
Abstract
This paper examines the Effect of Foreign Direct Investments (FDI) on the Development of stock market capitalization in Sub-Saharan African countries from 1984 to 2015. The study selected three sample countries in Sub-Saharan Africa namely, Nigeria, South Africa and Kenya and obtained secondary data namely Market capitalization ratio (dependent variable), Foreign Direct Investment ratio (independent variable)and Gross Domestic Product from the International monetary funds, World Bank, Bureau of Statistics, Central Banks of respective study countries. The methodology adopted include the unit root tests, least square regression and panel data analysis which were tested at the 5% level of significance and the result showed that FDI had a negative but statistically significant effect on market capitalization in both short-run and long-run equilibrium periods. The study concludes that there exist a significant effect of the FDI on the development of stock market capitalization in Sub-Saharan African countries and recommends that the region’s government provide an enabling environment to attract and sustain FDIspillovers as well as provide marketfriendly regulations especially investor protection to attract FDI to boast the development of stock market capitalization in the Sub-Saharan African Countries.
Authors and Affiliations
dr. Osadume Richard (Fcib), dr. (Mrs) Anyanwu A. Felicia
Keywords
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- EP ID EP411530
- DOI 10.9790/487X-2006016480.
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