ICT Adoption and Stock Market Development: Empirical Evidence Using a Panel of African Countries

Jerry Ikechukwu Igwilo,Athenia Bongani Sibindi

doi:10.3390/risks10020025

Jerry Ikechukwu Igwilo, Athenia Bongani Sibindi

Open Access

https://doi.org/10.3390/risks10020025

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Journal: Risks	Publication Date: Jan 19, 2022
Citations: 4	License type: CC BY 4.0

Affiliation: University of South Africa

Abstract

The aim of this study was to examine the impact of adopting information and communication technologies (ICT) on the development of African stock exchanges. The study examined a panel of 11 African stock exchanges for the period 2008–2017 and employed the generalised method of moments (GMM) to estimate the results. The results of the study documented that ICT adoption had a positive impact on stock market development in African countries. Firstly, it was found that the stock market traded volume and mobile–telephone user variables were positively related. Secondly, a positive relationship was also proven between the stock market traded volume and the broadband user variable. Thirdly, a positive relationship was documented between the stock market capitalisation variable and the fixed telephone user variable. Fourthly, the research findings confirmed a positive relationship between the stock market turnover ratio and the fixed telephone user variable. The findings of this study imply that policymakers should be more resolute when formulating ICT policies. ICT adoption can spur stock market development which in turn can propel economic growth, resulting in the economic prosperity of the African countries. Moreover, ICT adoption could enhance the integration of African stock exchanges, further buttressing the drive towards the common market areas in various regions.

Highlights

Academic Editor: MogensDevelopments in information and communication technologies (ICT) have affected livelihoods and various other aspects of human activities and interactions in the last few decades
The stock market traded volume variable demonstrates persistence over time, as it is highly positively related to its lagged value. The results of both the system–generalised method of moments (GMM) and feasible generalised least squares (FGLS) estimations document that the stock market traded volume variable is positively related to the broadband user and mobile–telephone user variables and are statistically significant
The primary aim of this study was to examine the impact of ICT adoption on stock market development in Africa

Summary

Introduction

Academic Editor: MogensDevelopments in ICT have affected livelihoods and various other aspects of human activities and interactions in the last few decades. ICT as the main driver of the transformation process (Cortés and Navarro 2011) They contended that the transformation force has permeated all strata of human settings, such as households, firms and governments at the local, regional, national and international levels. This assertion by Cortés and Navarro (2011) clearly indicates that ICT plays a very vital role in every sphere of our daily lives. Among the aspects of human activities and interactions that have been tremendously affected by ICT is the development of African stock markets. By implication, the study emphasised the importance of ICT adoption for the development of African stock markets

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