Abstract
The African stock market remains underdeveloped despite the increased number of stock exchanges in the region characterized by low market capitalization, volume and illiquidity. The efforts of the previous policies to promote stock market development and restore investors’ confidence in the region did not yield a positive outcome, as they are yet to meet the rising demand for capital by domestic firms. This article investigates the effects of life expectancy and financial crisis on the stock market development in Africa, using the pooled mean group (PMG) model for the sample period of 1996–2016. The findings reveal a positive and statistically significant long-run relationship between the life expectancy and stock market development. Furthermore, the financial crisis adversely affects the stock market development with an attendant decrease in investment. There is a need for policies that address infant mortality, encourage long-term investment and protect the African stock market against an adverse reaction of the financial crisis.
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