It Is Time to Reexamine the Role of Stock Markets in Developing Economies

Sharma, Parmendra; Roca, Eduardo

doi:10.1080/10599231.2012.671719

Cited by 14 publications

(10 citation statements)

References 50 publications

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“…This proposition is reinforced by the TRADE figure-the total value of shares tradedperhaps a better indication of the effectiveness of a stock market; a large stock market (MCAP) is not necessarily an active one, it is the level of activity or liquidity that really determines how effectively a market is able to accomplish its functions (Sharma and Roca, 2012). In 2009 Fiji's TRADE was only 0.02% of GDP compared to 349.45% for Australia, 83% for Malaysia, 35.87% for Thailand and 13.59% for New Zealand.…”

Section: Financial Structure In the South Pacificmentioning

confidence: 99%

Determinants of Bank Credit in Small Open Economies: The Case of Six Pacific Island Countries

Sharma

Gounder

2012

SSRN Journal

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This paper examines the changes in bank credit to private sector across six economies in the South Pacific. An extensive time-series and cross-country panel data allow us to draw new and broader lessons compared to existing research, which have tended to focus mostly on single countries with shorter time periods. Results show that rising average lending and inflation rates may be detrimental to credit growth, and that deposit and asset size contribute positively to credit growth. Results also indicate that stronger economic growth leads to higher credit growth. A number of policy implications emerge and are also discussed.

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Section: Financial Structure In the South Pacificmentioning

confidence: 99%

Determinants of Bank Credit in Small Open Economies: The Case of Six Pacific Island Countries

Sharma

Gounder

2012

SSRN Journal

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“…While Fiji's financial sector may be the largest and most advanced in the South Pacific (ADB, 2005), bond markets are infinitesimal and confined to government and statutory bodies and the stock market remains small, illiquid and inefficient after more than 30 years of existence (Sharma and Roca, 2012). Over the 1970-2007 period, the banking sector provided 92% of all financial institution credit to the private sector.…”

Section: Introductionmentioning

confidence: 99%

Determinants of bank net interest margins in Fiji, a small island developing state

Gounder

Sharma

2012

Applied Financial Economics

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This paper investigates the determinants of net interest margins (NIM) of banks in Fiji, a small island developing state in the South Pacific, over the 2000-2010 period. Based mainly on the Ho and Saunders (1981) dealership model and extensions thereto, this study uses a number of panel data estimation techniques to control for possible heterogeneity across banks and various assumptions about errors. Consistent with the theoretical model, NIM has a positive association with implicit interest payment, operating cost, market power and credit risk, and a negative association with the quality of management and liquidity risk. However, the association with bank capital and opportunity cost of required reserves do not conform to expectations. Policy implications are discussed.

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“…In the case of Nigeria, growth became evidenced only when FD crosses 15.6199% of private credit to GDP. This understanding may also be useful to explain the puzzle in the case of Fiji Island reported in (Sharma & Roca, 2012). The low point of breaks (or equilibrium) in the FD/growth/growth volatility relationships implies that the Nigerian economy is not able to draw maximum growth and volatility reduction benefit from FD.…”

Section: Discussing the Empirical Resultsmentioning

confidence: 99%

Non-Linear Relationship between Financial Development, Economic Growth and Growth Volatility: Evidence from Nigeria

Ou¹,

Alagidede²

2018

Preprint

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The relationship between economic growth, growth volatility and financial sector development continues to attract attention in the theoretical and empirical literature. Over time, some studies hypothesize that finance has a causal linear relationship with growth. Recently several other authors contradict this claim and argue that the relationship that exists between finance and growth is nonlinear. We investigate these claims for Nigeria for the period between 1970 and 2015, using semi-parametric econometric methods, Hansen sample splitting techniques and threshold estimator. We observed no evidence of ‘Too much finance’ as claimed by many researchers in recent times. We show that the relationship between financial development and economic growth is U-shaped. This is equally true for the relationship between financial development and growth volatility. We also discuss policy implications of our findings and recommend financial innovations and decentralization of stock exchanges to boost access to financial services, in addition, improved regulation to enhance financial market efficiency.

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It Is Time to Reexamine the Role of Stock Markets in Developing Economies

Cited by 14 publications

References 50 publications

Determinants of Bank Credit in Small Open Economies: The Case of Six Pacific Island Countries

Determinants of Bank Credit in Small Open Economies: The Case of Six Pacific Island Countries

Determinants of bank net interest margins in Fiji, a small island developing state

Non-Linear Relationship between Financial Development, Economic Growth and Growth Volatility: Evidence from Nigeria

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