Stock market development: a reflection of governance regulatory framework in Nigeria

Fagbemi, Fisayo; Adeosun, Opeoluwa Adeniyi; Bello, Kehinde Mary

doi:10.1108/jcms-07-2021-0022

Cited by 4 publications

(2 citation statements)

References 46 publications

(64 reference statements)

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“…The three indicators are well known in other related studies in the literature (Beck et al 2000;Atje and Jovanovic 1993;Naceur et al 2007;Arestis et al 2001;Fagbemi et al 2021;Kapaya 2020;Levine and Zervos 1996;El-Wassal 2013). Table 1 reports the results of testing the differences between the three indicators using the Kruskal and Wallis (1952) test.…”

Section: Dependent Variablesmentioning

confidence: 95%

The Use of Economic Indicators as Early Signals of Stock Market Progress: Perspectives from Market Potential Index

Eldomiaty,

Azzam,

Fouad

et al. 2024

IJFS

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The progress of financial markets depends on the way world investors foresee the market potential of the country of choice. Countries that are associated with favorable economic incentives are able to motivate investments in their respective stock markets. The objective of this paper is to examine the role of the many economic components which constitute the Market Potential Index in enhancing stock market progress. The methodology goes through testing and estimation. The tests include linearity versus nonlinearity (RESET), normality, and cointegration. The estimation includes cointegration regression and discriminant analysis to distinguish between high and low stock market progress. This study examines unbalanced panel data that covers the years 1996–2022 for 54 countries where a stock market exists. The results show the following: (a) increases in people’s expenditure result in decreases in consumption of investment in financial securities; (b) the investments in infrastructure technology is positively associated with stock market progress; (c) the positive effect of economic freedom indicates that further adaptive trading regulations are beneficial to stock market progress; (d) increases in imports consume large proportions of people’s income, coming at the expense of investment in financial securities; (e) stock markets that are associated with high country risk are characterized by a positive risk–return tradeoff, i.e., a high risk premium; (f) the stock markets listed in the MPI can reach high progress by improving three indicators, namely commercial infrastructure, market receptivity, and country risk. This paper offers a thorough and unique examination of the institutional arrangements and stock market progress. The paper offers a guide to policy makers about how economic institutional arrangements can be promoted in order to reach high stock market progress.

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Section: Dependent Variablesmentioning

confidence: 95%

The Use of Economic Indicators as Early Signals of Stock Market Progress: Perspectives from Market Potential Index

Eldomiaty,

Azzam,

Fouad

et al. 2024

IJFS

View full text Add to dashboard Cite

show abstract

“…Similarly, in some African countries, Dwumfour and Ntow-Gyamfi (2018) support the assertion that the quality of institutions stimulates financial sector development. Regarding Nigeria, while Fagbemi et al (2020) argue that regulatory quality is a significant determinant of stock market development, Fagbemi and Ajibike (2018) posit that institutional quality (institutional index representing political risk index such as investment profile, control of corruption, law and order, democratic accountability, government stability and bureaucratic quality) does not significantly explain financial sector development in the country. Strong institutional quality and a good legal system in a country would enhance the spillover effect of FDI on the recipient country’s economic development, resulting in increased activeness of FDI in the promotion of financial sector development (Alfaro et al, 2010).…”

Section: Institutional Quality and Financial Sector Developmentmentioning

confidence: 99%

Trade–Finance Nexus: The Centrality of the Quality of Institutions in Sub-Saharan African Leading Economies

Fagbemi

Fajingbesi²,

Nzeribe

2023

Foreign Trade Review

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The study examines the interaction effect of trade and institutional quality on financial sector development in 20 leading economies in sub-Saharan Africa selected based on 2018 GDP per capita ranking (top 20 richest economies by GDP per capita released by the IMF) over the period 2005–2020. Using system-generalised method of moments estimation, the results indicate that the effect of the interaction term of trade and regulatory quality on financial development is positive and significant. Further findings show unidirectional causality running from the interaction term to financial development, implying that the likelihood of trade enhancing financial development depends on the soundness of the regulatory framework. It is confirmed that the magnitude and direction of the effect of trade on financial development are sensitive to the quality of institutions. Therefore, the poor quality of regulations on business activities and financial services could undermine the salutary impact of trade on financial development. It is suggested that creating a conducive regulatory environment to improve the level of financial development is crucial for mitigating the potential impact of the weak institutional quality risks. This remains a significant prerequisite for having a competitive business environment, thereby stimulating the role of trade in the process of financial development.

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Impact of Board Committee Characteristics on Social Sustainability Reporting in Sub-Saharan Africa: The Moderating Role of Institutional Ownership

Blay,

Hoeyi,

Badu

et al. 2024

JRFM

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The corporate strategic planning of businesses in sub-Saharan Africa (SSA) largely focuses on immediate financial performance with minimal credence to social sustainability. Thus, studies on the linkage between corporate governance (CG) and sustainability reporting have focused on developed economies. This study therefore investigated the role of institutional ownership in the impact of board committee characteristics on social sustainability reporting. This study involved strongly balanced panel data with 1969 observations of 275 publicly listed non-financial firms in SSA within the timeframe of 2012 to 2021. Data were analyzed using STATA 14.1. The hypotheses were tested using the two-step system of the generalized method of moment (GMM) using the Arellano–Bond dynamic panel data estimation method. The rate of social sustainability reporting was 39.4%. Relatively, Mauritian and South African firms had the most effective board committee characteristics and higher levels of social sustainability reporting. Although institutional ownership had no significant effect on social sustainability reporting, it moderated the effect of sustainability committee independence and sustainability committee gender diversity on social sustainability reporting. This paper presents a new perspective on the corporate governance and social sustainability literature by examining the effect of institutional ownership on board committee characteristics and social sustainability reporting in SSA. In terms of policy implication, there is the need for mandatory regulatory and legal CG framework that is regularly updated at national and regional levels in SSA to motivate listed firms to establish sustainability committees with efficient characteristics to promote social sustainability reporting.

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Stock market development: a reflection of governance regulatory framework in Nigeria

Cited by 4 publications

References 46 publications

The Use of Economic Indicators as Early Signals of Stock Market Progress: Perspectives from Market Potential Index

The Use of Economic Indicators as Early Signals of Stock Market Progress: Perspectives from Market Potential Index

Trade–Finance Nexus: The Centrality of the Quality of Institutions in Sub-Saharan African Leading Economies

Impact of Board Committee Characteristics on Social Sustainability Reporting in Sub-Saharan Africa: The Moderating Role of Institutional Ownership

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