Tweet

VI. D. Shareholder Protection: WHAT DETERMINES STOCK MARKET DEVELOPMENT IN AFRICA?

Guest post by: International Monetary Fund

Article Overview: Another key determinant of stock market development is the level of shareholder protection in publicly traded companies, as stipulated in securities or company laws (Shleifer and Vishny, 1997).

VI. D. Shareholder Protection: WHAT DETERMINES STOCK MARKET DEVELOPMENT IN AFRICA?

Another key determinant of stock market development is the level of shareholder protection
in publicly traded companies, as stipulated in securities or company laws (Shleifer and
Vishny, 1997). Stock market development is more likely in countries with strong shareholder
protection because investors do not fear expropriation as much. In addition, ownership in
such markets can be relatively dispersed, which provides liquidity to the market. La Porta et
al (1999) provide evidence for the importance of minority rights protection by using indicators of the quality of shareholder protection as written in laws. They demonstrate that
the quality of shareholder protection is correlated with the capitalization and liquidity of
stock markets in 49 countries around the world. Laporta et al (1997) find that countries with
lower quality of legal rules and law enforcement have smaller and narrower capital markets
and that the listed firms on their stock markets are characterized by more concentrated
ownership. Demirguc-Kunt and Maksimovic (1998) show that firms in countries with high
ratings for the effectiveness of their legal systems are able to grow faster by relying more on
external finance.

IMF Working Paper
African Department
Stock Market Development in Sub-Saharan Africa: Critical Issues and Challenges
Prepared by Charles Amo Yartey and Charles Komla Adjasi
August 2007

Related Articles
  VI. A. Macroeconomic Stability: WHAT DETERMINES STOCK MARKET DEVELOPMENT IN AFRICA?
  VI. B. Banking Sector Development: WHAT DETERMINES STOCK MARKET DEVELOPMENT IN AFRICA?
  Introduction: Stock Market Development in Sub-Saharan Africa
  VII G. Strengthen Education: PROMOTING STOCK MARKET DEVELOPMENT IN AFRICA
  VI. C. Institutional Quality: WHAT DETERMINES STOCK MARKET DEVELOPMENT IN AFRICA?

Article Tags: amo, capital markets, capitalization, challenges, countries around the world, critical issues, determinant, external finance, imf, investors, law enforcement, liquidity, maksimovic, minority rights, porta, shareholder protection, shleifer, stock market development, stock markets, sub saharan africa



Related Forum Posts
Re: Hello from South Africa - you are welcome to the forum of achievers.its great to have you here,i also reside in SOUTH AFRICA.
New Norton Virus Protection features? - A couple of days ago, some of the software on my computer stopped working. I used to be able to use a PDF maker to convert word files to PDF...that no longer works. Here, I used to be able to see all the smilies on the right hand side of the page, when I'm writing a message as I am now...now all I see over there are dots in the center of a square. And when I [i:3hrut9ck]read [/i:3hrut9ck]messages, I no longer see those smiles, either. I never did anything to my computer myself, but I've got Norton Virus Protection and periodically it automatically updates itself ... and I'm wondering is some new update has screwed up my computer. Anyone have any thoughts on this???
What the Better Business Bureau does - [quote:1urk8etq]There is such a diversity of businesses out there, how effetive are they in protecting the consumers or entrepreneurs[/quote:1urk8etq] The way I understad it, at least here in the US, every BBB chapterhas a website, and on that website is a list of companies who have had complaints about them. People trying to decide if they want to use a company check that list...and if there's no complaints.... That's why it's imperative for people who have been ripped off to complain to their BBB. It might not help them, but it will help other people down the line. On the other hand, people do sometimes maliciously make complaints about businesses - so I tink the BBB does talk to both sides to see what's what... In addition to the BBB, each state has its own Consumer Protection Agency, and they also inspect claims of wrongdoing.
Re: What the Better Business Bureau does - [quote="OmnivoreInk":25i6g5su][quote:25i6g5su]There is such a diversity of businesses out there, how effetive are they in protecting the consumers or entrepreneurs[/quote:25i6g5su] The way I understad it, at least here in the US, every BBB chapterhas a website, and on that website is a list of companies who have had complaints about them. People trying to decide if they want to use a company check that list...and if there's no complaints.... That's why it's imperative for people who have been ripped off to complain to their BBB. It might not help them, but it will help other people down the line. On the other hand, people do sometimes maliciously make complaints about businesses - so I tink the BBB does talk to both sides to see what's what... In addition to the BBB, each state has its own Consumer Protection Agency, and they also inspect claims of wrongdoing.[/quote:25i6g5su] While I was managing a home improvement business, we joined the BBB. They got our file entered in the computer wrong and ended up posting 3 major complaints against us. They were actually for a different company that wasn't related and that wasn't even similar in any way. That caused me a mountain of problems and cost us several big dollar jobs. Eventually they bothered to speak with us - it took about 4 months to fix the problem. That was 4 months after I found out about it. They didn't offer a refund for the months that we had a negative rating, only fixed the problem after I spent many hours pushing them to fix it and they had the nerve to push me to renew my membership. Needless to say, I haven't joined the BBB again. And, they charged me decent money to be a member. Shri
Protect yourself from Hackers - I received this from a newsletter from FXpro that I subscribed to. Please read and apply In the 21st Century internet is widely used for everyday job. Despite the "ease" and free time offered from internet use, one should be aware of the dangers and be prepared to avoid and safeguard him/herself from any attacks his/her computer may accept or even from the "unwanted" e-mails received. Golden Rules of Protection When using the internet make sure you have an antivirus program installed in order to avoid intrusions in your Computer, If you are using wireless internet connection make sure you have your connection locked, Do not save any official documents on your Computer, such as Copy of Passport, ID, Bank account numbers, copy of cards in case your Computer is hacked or even stolen, Keep all access codes/passwords in a safe place, Do not share an e-mail address with any person, Do not reveal any access codes, passwords to any person, If you are using a public Computer, ie in an internet cafe, make sure you log out any internet sites you have visited before leaving and deleting the cookies in order to minimize the risk of someone following your tracks, Regularly change your passwords on your e-mail accounts, or any other account that requires passwords, Be careful of e-mails received. Always check the e-mail address and in case you believe that this does not come from a person, Company, Organization you might be dealing with always send an e-mail to an e-mail address stated on the person's business card, Company's, Organization website requesting them to confirm that the e-mail address on the e-mail received belongs to them, before you reveal any information, Always have in mind that an established Company/Organization never uses an e-mail address such as g-mail, yahoo, hotmail etc thus always be careful when you are receiving such e-mails, even if it appears to be from a Company/Organization you are dealing with, Always remember that a Company or Organization will never require you to send them your login/password/access codes, When using a website that requires an access code, do not allow the browser to remember your passwords


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Sales Courage and Resilience

How to Sell to the Price Driven Customer

How To Be Happy at Work? Acknowledge Yourself

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.