Should Ethiopia Consider Establishing Stock Market?
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Date
2018-01
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Addis Ababa University
Abstract
The study assessed potential implication for the establishment of Stock market in Ethiopia. To achieve the overall objective of the study and data were gathered from both primary sources as well as secondary sources. Accordingly, shareholders of Banks, and Management officials of banks participated in the study as a primary sources of the study while, scholar’s arguments, regulatory of the country, policy, and other related researches and articles were collected as a secondary data. Both the primary and secondary data of the study were analyzed in mixed approach. This is because, as the study is argumentative in its very nature, it was difficult to reach on conclusion only considering primary respondents view, so that the study were substantively compare and contrast respondents view with several types of scholar arguments as well as government regulatory and policies. In this regard, the collected data from several sources were analyzed using descriptive and cross-section data analysis method. And the study were generally, discussed in four main parts, in the first part the study tried to indicate respondents background, in the second part the study analyzed potential implication of stock market establishment in Ethiopia from the demand side, in the third part the study also assessed potential implication from the supply side, and finally the analysis’s was tried to indicate prerequisite or major factors affecting the establishment of stock market in Ethiopia. Based on the analyses the finding implied that, the expansion of private sectors, government activities to transfer some of the public organization in to private, large illiquid assets of firms, the increasing innovators and entrepreneurs activities and other specific potentials sectors were identified as potential implication dictated the need to establishment of stock market in the country. However, the environmental challenges of the country such as, lack of regulatory law, technological development, lack of good governance, lack of corporate laws affect the establishment of stock market in Ethiopia. Based on the findings the study forwarded some of the recommendation such as, government need to established regulatory laws that enhance stock market exchange; and as stock exchange solve the problem of illiquidity of firms create a lot of opportunities for small business entrepreneurs; official in the finance sectors should give attention for the establishment of stock market in Ethiopia.
Description
A Thesis Submitted to Addis Ababa University Department of Accounting and Finance in Partial Fulfillment of Master in Accounting and Finance
Keywords
Ethiopia, Stock Market