SME Stock Markets in Tropical Economies: Evolving Efficiency and Dual Long Memory

Abstract

This paper examines the evolving efficiency and the joint effects of thin trading, structural breaks and inflation on dual long memory in Small and Medium Enterprise stock markets in Hong Kong, Singapore, Thailand and Malaysia. The state‐space GARCH‐M, ARFIMA‐FIGARCH, ARFIMA‐FIAPARCH and ARFIMA‐HYGARCH models are adopted. The results determine that the Hong Kong and Singapore markets exhibit potential tendencies towards efficiency, implying the efficacy of several institutional reforms. The three aforementioned factors jointly have reducing effects on the magnitude and/or statistical significance of long‐memory estimates. The Thailand and Malaysia markets show a smaller degree of volatility persistence, indicating a good hedge for portfolio risk management.

Alternative Financing for Sme’s: A Case of the Service Sector In Ghana

“…In other word, stock markets promote high remittance inflows (Issahaku, Abor and Harvey (2017). Nguyen et al (2020) argue that countries in the tropical economies are at the developmental stages of the stock markets and the dependent institutions, which requires some level of efficiency to develop. Johnson and Kotey (2018) assessed the influence of the Ghana Alternative Market on SMEs and the economy and discovered the market was fraught with challenges and stagnated growth.…”