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Purpose This paper aims to investigate the effect of presidential elections on stock return volatility in five leading stock markets in sub-Saharan Africa. Design/methodology/approach This paper uses various criteria to select an appropriate generalized autoregressive conditional heteroscedasticity model to estimate the second moment of the return distribution with the inclusion of pre- and post-presidential election dummy variables that capture the effect of presidential elections on stock market volatility. Findings The empirical results show that high pre-election uncertainty increases volatility in the Nairobi Stock Exchange, Stock Exchange of Mauritius and the Nigeria Stock Exchange. Furthermore, the results show that volatility in stock return is reduced 90 days after an election in Nigeria and South Africa but increases 90 days after elections in Ghana. Originality/value Contrary to the previous studies that are conducted in a single country with focus on specific elections, this paper provides a comparative analysis of presidential elections and stock return volatility in five leading stock markets in sub-Saharan Africa.

Purpose The purpose of this paper is to investigate the micro determinants of the extent of credit rationing experienced by small and medium-sized enterprises (SMEs) in Ghana. Design/methodology/approach The study adopted the direct approach to investigating the presence of credit rationing. This involves the use of surveys permitting loan applicants to report on their credit market experiences. The multinomial logistic regression model was then applied to the survey data to arrive at the findings reported. Findings The study amongst other things confirms the existence of credit rationing in the SME sector. It also revealed that the extent to which SMEs are rationed varies and these variations are determined by the characteristic of the SME owner and the characteristics of the business. Research limitations/implications The use of the survey method in investigating credit rationing could introduce some biases in the responses obtained. However, the lack of publicly available data did not permit the use of the indirect method which is based on the testing for possible violation of the permanent income hypothesis. Despite its weakness, the survey method remains the more realistic approach to investigating credit constraints especially in the data-constrained developing countries. The design and piloting of the questionnaire as well as the use a large sample size all went a long way to reduce any possible biases in the responses. Originality/value Despite the fact that a number of studies exist on SME financing problem in Ghana, available studies present the problem as if it were the same for all SMEs. Even though there is evidence to suggest that SMEs may be rationed in the credit market to different extents, currently, there are no known studies that have empirically investigated the various degrees of rationing and factors that determine the extent to which SMEs may be credit rationed. This paper thus attempts to contribute to the literature by unearthing these factors.

PurposeThe purpose of this paper is to investigate investor herding behaviour and the effect of presidential elections on investor herding behaviour in African stock markets at the sector level.Design/methodology/approachThe study segregates listed firms into financial, consumer goods, consumer services and basic materials sectors and uses the cross-sectional absolute deviation approach as a metric of detecting herding in each of the sectors. The authors extend the model to tease out the effect of presidential elections on investor herding behaviour.FindingsThe study reveals that sectoral differences are fundamental to the evolution of herding. Herding is prominent in a financial services sector dominated by banks. The phenomenon also prevails in markets with smaller consumer goods and services sectors. A post-presidential election effect on investor herding is found for the consumer goods and services sectors of Ghana and a pre-presidential election effect is documented in Nigeria's consumer services sector. The authors conclude that post-presidential election effect is as a result of political connections whilst a pre-presidential election effect is attributable to political business cycles.Research limitations/implicationsThe study is based on four African countries due to data constraints. Nonetheless, the study is the first in Africa to the best of the authors' knowledge, and the results are very solid and have a lot of practical and policy implications.Practical implicationsThe study has implications for investors as it guides investment behaviour in pre- and post-presidential election periods.Originality/valuePast studies on investor herding behaviour in African stock markets have largely concentrated on the aggregate market. Knowledge on sectoral differences in investor herding is almost non-existent for African stock markets. Furthermore, premised on the fact that stock markets react to presidential elections, there is no known study that have attempted to examine the effect of presidential elections on investor herding behaviour. This paper contributes to the literature by providing evidence on sectoral differences in investor herding behaviour and the effect of presidential elections on sectoral herding behaviour.

PurposeThe purpose of this paper is to investigate overconfidence bias and the effect of presidential elections on investor overconfidence bias in sub-Saharan African stock markets.Design/methodology/approachThe study uses the vector autoregressive (VAR) model and its associated impulse response functions to investigate overconfidence bias. Furthermore, we make use of OLS regressions to examine the effect of presidential elections on investor overconfidence bias.FindingsInvestor overconfidence bias is present in the markets of Ghana and Tanzania suggesting that the phenomenon persists in sub–Saharan Africa's small markets. We also find that post-presidential election periods have a dampening effect on investor overconfidence in a country where there is less post-election uncertainty.Originality/valueDespite the previous studies on investor overconfidence bias in sub-Saharan Africa, this paper to the best of the authors’ knowledge, is the first to investigate investor overconfidence bias in the context of presidential elections.