The impact of economic fundamentals on stock markets in southern Africa
The issue of whether stock markets reflect economic fundamentals or speculative bubbles is an important one for their potential role in allocating capital, and relates to a policy issue of whether stock markets should be encouraged in developing countries. This article examines the impact of both domestic and foreign economic factors on real stock market returns in three southern African stock markets - South Africa, Zimbabwe and Botswana, from 1985-95 - using cointegration and error correction techniques. It finds that, while in all cases stock markets are influenced by domestic economic growth, there are no common patterns beyond this. The influence of other domestic and economic variables depends on the size, openness and market-orientation of the individual economies, as well as the size and liquidity of the various stock exchanges. Where foreign economic variables are important, they appear to be those related to trade, rather than international capital flows, indicating that there is little integration of these capital markets, whether regionally or internationally.
Year of publication: |
2000
|
---|---|
Authors: | Jefferis, Keith ; Okeahalam, Charles |
Published in: |
Development Southern Africa. - Taylor & Francis Journals, ISSN 0376-835X. - Vol. 17.2000, 1, p. 23-51
|
Publisher: |
Taylor & Francis Journals |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
The impact of economic fundamentals on stock markets in Southern Africa
Jefferis, Keith R., (2001)
-
International stock market linkages in Southern Africa
Jefferis, Keith R., (1999)
-
The impact of economic fundamentals on stock markets in Southern Africa
Jefferis, Keith R., (1999)
- More ...