Manuscript Title:

IMPACT OF FOREIGN FLOWS ON STOCK MARKET PERFORMANCE: EVIDENCE FROM SELECTED SUB-SAHARAN AFRICAN COUNTRIES (1986-2020)

Author:

ONU CALISTUS C, ELEJE EMMANUEL C, Dr. EBERE UME KALU, JOSAPHAT U. ONWUMERE

DOI Number:

DOI:10.17605/OSF.IO/97K5Z

Published : 2022-11-10

About the author(s)

1. ONU CALISTUS C - Department of Banking and Finance, University of Nigeria, Enugu Campus.
2. ELEJE EMMANUEL C - Department of Banking and Finance, University of Nigeria, Enugu Campus.
3. Dr. EBERE UME KALU - Department of Banking and Finance, University of Nigeria, Enugu Campus.
4. JOSAPHAT U. ONWUMERE - Department of Banking and Finance, University of Nigeria, Enugu Campus.

Full Text : PDF

Abstract

This study used panel estimation techniques to evaluate the impact of foreign flows on stock market performance: evidence from selected sub-Saharan African countries covering the period, 1986-2020. Foreign flow was disaggregated into foreign portfolio investment, foreign direct investment and diaspora remittances while stock market performance was proxied by market capitalization and liquidity respectively. The study found among other things that diaspora remittance negatively and insignificantly impacted on stock market capitalization and while it shares a positively significant relationship with market turnover. Foreign direct investment and stock market capitalization were found to have a positive but insignificant relationship while a positively significant relationship exist with stock market turnover. Also, foreign portfolio investment was found to significantly affect both stock market capitalization and stock market turnover respectively. The conclusions drawn in this study are considered significant as it opens new research frontiers in the area of discovering the degree to which Sub-Saharan African countries are embracing foreign investment patronage on domestic market activities with emphasis on policy initiatives and practice.


Keywords

Foreign Direct Investment, Foreign Portfolio Investment, Diaspora Remittance, Foreign Flows, Stock Market Performance.