Government Quality Determinants of Stock Market Performance in African Countries

Abstract

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Correcting Inflation with Financial Dynamic Fundamentals: Which Adjustments Matter in Africa?

“…Ultimately, low inflation in Africa would improve opportunities for efficient alternative forms of investment in compensation for the failed privatization projects. Consistent with Asongu (2012Asongu ( , 2013a SSA's share of Foreign Direct Investment (FDI) averages 1% of global flows (Bartels et al, 2009) and there is a pressing need for generation of private capital flows that are complementary to FDI (Rolfe & Woodward, 2004). Low inflation will ease the recommendation of Darley (2012) in the expansion of regional trade arrangements as key to looking outside traditional flows of FDI to Africa, which have been largely limited by political economy considerations, regulatory uncertainty, skills, labor, regulation and exchange rate volatility (Bartels et al, 2009;Tuomi, 2011).…”

“…Firstly, with the dramatic rise in the price of stable food commodities over the past decade 2 , while the literature on the causes and impacts of the crisis in global food prices in the developing world has mushroomed in recent years (Piesse & Thirtle, 2009;Wodon & Zaman, 2010;Masters & Shively, 2008), we are unaware of studies that have closely examined how financial policies affected consumer prices. Hence, correcting inflation is particularly important in fighting poverty (Funjii, 2011) on the one hand and; on the other hand directly (Ibeh et al, 2007;Acquaah et al, 2008;Musila & Al-Zyoud, 2012) or indirectly (Asongu 2012(Asongu , 2013aBartels et al, 2009;Rolfe & Woodward, 2004;Tuomi, 2011) eases the doing of business in Africa.…”

On the Substitution of Institutions and Finance in Investment

“…The insignificant effect of Polity IV has a twofold explanation: the time and level hypotheses for the benefits of democracy. In line with Asongu (2012b), the time and level hypotheses have been documented: in many countries in Africa (Lemarchand, 1972), Southeast Asia (Scott, 1972), India (Wade, 1985) and Turkey (Sayari, 1977); post 1990 communist countries like Russia (Varsee, 1997) and: many Latin American countries upon different waves of democratization (Weyland, 1998). …”

Foreign Aid Fiscal Policy: Theory and Evidence

“…On the one hand, economic prosperity could be associated with higher levels of private investment. On the other hand, recent African institutional literature has shown that wealtheffects matter in institutional quality (Asongu, 2012c;2013b) …”