Pan Africa SAJE R&R BH.pdf (650.55 kB)
The impact of firm size and liquidity on the cost of external finance in Africa
journal contribution
posted on 2023-06-08, 23:39 authored by Bruce Hearn, Jenifer PiesseEstablished illiquidity measures are constructed for emerging markets in Africa and used to determine which best explains trading costs. Costs of equity are derived from an augmented Capital Asset Pricing Model for a sample of emerging financial markets generally ignored in the literature. These include: South Africa and Namibia, three countries in North Africa and four in Sub-Saharan Africa (SSA), plus London and Paris as examples of integrated markets. Minimum variance portfolios are constructed and asset weights derived, with the sample divided into countries dependent on their legal regime. Portfolio weights are shown to be directly related to well-regulated markets with high standards of corporate governance and disclosure, and firms seeking cost-effective finance from SSA stock markets are at a distinct disadvantage compared with those in Northern Africa, South Africa and, in particular, London and Paris.
History
Publication status
- Published
File Version
- Accepted version
Journal
South African Journal of EconomicsISSN
0038-2280Publisher
Economic Society of South AfricaExternal DOI
Issue
1Volume
83Page range
1-22Department affiliated with
- Business and Management Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2015-12-04First Open Access (FOA) Date
2016-10-26First Compliant Deposit (FCD) Date
2016-10-26Usage metrics
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