Determinants of corporate listings on stock markets in Sub-Saharan Africa: Evidence from Ghana

Abstract

Sub-Saharan Africa (SSA) economies have established stock markets to encourage the mobilization of domestic funds and attract foreign capital in-flows for corporate investment and growth. But domestic corporate listings on stock markets have been abysmal. This study examines the reasons behind the low patronage of stock markets by domestic firms in SSA using Ghana as a case study. Data for the study was obtained from 110 out of the 200 largest firms in Ghana and included firms which were listed on the stock market and unlisted firms over three time-periods from 2002 to 2009. The findings show that knowledge about stock market dynamics and financial institutions' support encourages listing on the stock market. However, extensive information and disclosure costs requirements, and loss of ownership and control discourage listing on the stock market.