Long Run Impacts of Interest Rate Liberalization on Stock Market Development

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• 作者：Wakilat Balogun ; ^{wakbal70@gmail.com" class="auth_mail" title="E-mail the corresponding author} ; ^{wakwab@yahoo.com" class="auth_mail" title="E-mail the corresponding author} ; Jauhari Dahalan ; Sallahuddin Hassan
• 关键词：Interest rate ; liberalization ; pooled mean group ; stock market development.
• 刊名：Procedia - Social and Behavioral Sciences
• 出版年：2016
• 出版时间：31 May 2016
• 年：2016
• 卷：219
• 期：Complete
• 页码：126-133
• 全文大小：169 K

文摘

The paper investigates the long run impacts of interest rate liberalization on stock market development in the seven selected sub-Saharan African countries using panel dataset that spans 1990 to 2013. Interest rates deregulation is measured by liberalization index considering the different periods that the respective SSA countries liberalized their interest rates. The index of stock market development is proxy by market capitalization. The study employs dynamic heterogeneous panel method using the technique of Pooled Mean Group (PMG). The results reveal that on the average liberalizing the interest rates has a negative long run impact on the development of the stock markets in the seven selected SSA economies. The policy recommendation as a result of this finding is that liberalization of interest rates in the SSA region should be a guided one.