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The limited role of small stock exchanges in economic development: A case study of Mozambique and Swaziland
journal contribution
posted on 2023-06-08, 11:02 authored by Bruce Hearn, Jenifer PiesseThe establishment of a successful stock market in a developing economy can provide a major source of development finance, both channelling domestic savings and attracting foreign investment. But small markets generally fail. Two micro-markets, Mozambique and Swaziland, provide an interesting case study to examine the features of new markets in sub-Saharan Africa that differ in a number of ways, including colonial legacy, membership of the Common Monetary Area and the dynamics of the political economy that defines the links between the citizens, the local elite and the state. In both countries, the operational aspects of the stock exchange are clearly inadequate as a means of promoting international investment. Thus, gains from regional integration initiatives or foreign investment are unlikely, as the market’s small size and incomplete institutions currently offer limited potential for either domestic or international risk diversification. However, the political economy in both countries is the real barrier to growth.
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Publication status
- Published
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- Published version
Journal
Development Southern AfricaISSN
0376-835xPublisher
Taylor & FrancisExternal DOI
Issue
2Volume
27Page range
205-224Department affiliated with
- Business and Management Publications
Full text available
- No
Peer reviewed?
- Yes
Legacy Posted Date
2012-04-23First Compliant Deposit (FCD) Date
2012-02-24Usage metrics
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