Electronic trading and stock market participation in Africa: Does technology induce participation?

Adamolekun, Gbenga; Sakariyahu, Rilwan; Lawal, Rodiat; Ahmed, Ammar

Abstract

This study examines the effect of migrating to electronic trading platforms on stock market participation among African stock exchanges. Using Bayesian estimations, we demonstrate that transitioning from a physical to an electronic stock exchange decreases trading activity on the stock exchange whilst increasing listing. Our findings further reveal that the impact of migration is more pronounced for non-Sub-Saharan African countries relative to Sub-Saharan countries. In terms of policy, the results imply that African exchanges cannot optimise the efficiency of their stock markets simply by migrating to electronic trading platforms.

• Journal Article Type: Article
• Acceptance Date: Jan 16, 2023
• Online Publication Date: Jan 24, 2023
• Publication Date: 2023-03
• Deposit Date: Feb 1, 2023
• Publicly Available Date: Feb 1, 2023
• Journal: Economics Letters
• Print ISSN: 0165-1765
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 224
• Article Number: 110991
• DOI: https://doi.org/10.1016/j.econlet.2023.110991
• Keywords: Stock market participation, Electronic trading platform, Africa, Sub-Saharan Africa, Technology