What Can Ethiopia Learn from African Countries Stock Market? Frame Work, Experience and Benefit
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Date
2012-06
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A.A.U
Abstract
\Vhat Can Ethiopia Learn from African co untries Stock Market? Frame Work,
Experience and Benefi t
Henok Abadi Addi s Ababa University, 2012
This paper aimed to draw lessons what Ethiopia can learn from Afri can countries stock
market. Thus the main objective of the study has been focused on examining and
assessing lessons regarding framework, experience and benefits of already developed
stock markets sampled from j I African co un tries during 1991-20 10. Both descriptive and
econometric anal ysis has been adopted. Descriptively different frameworks and
expenences of sampled African stock markets has been explored in regard to
institutional, traditional and asset pricing characteristics of stock markets. On the other
hand, three econometrics models using a panel data model, dynamic panel data model
and Umestricted Vector Auto regression (V AR) has been employed to show the
cconomic bcncfits of development of stock market on growth in Africa collectively and
specifically a simulation in Ethiopia 's growth model. Basically the findings had revealed
the fact that stock markets ab ility to enhance the effi ciency of investments and through
which its effect extends to growth is highly dependent on its level of effici ency. This was
evident from econometric approach where stock market development enhanced
investment positi vely but their indirect impact on growth were negatively associated due
to stock market variables fluctuation and inefficient operation and management of the
market in the sampled African stock markets. Besides advocating the establi shments of
new stock market in Ethiopia with efficient institutional formati on, maintaining
sustainable boost in stock market variables and improving way of operating the markets
successively were recommended to enhance growth through stock market development
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Ethiopia Learn from African Countries Stock Market