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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 Piesse
The 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.

History

Publication status

  • Published

File Version

  • Published version

Journal

Development Southern Africa

ISSN

0376-835x

Publisher

Taylor & Francis

Issue

2

Volume

27

Page range

205-224

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-04-23

First Compliant Deposit (FCD) Date

2012-02-24

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