JOURNAL OF APPLIED BUSINESS AND ECONOMICS
Internal and External Drivers of Stock Market Returns in Ghana and Nigeria: DOLS and FMOLS Approaches
Author(s): Joseph Emmanuel Tetteh
Citation: Joseph Emmanuel Tetteh, (2020) "Internal and External Drivers of Stock Market Returns in Ghana and Nigeria: DOLS and FMOLS Approaches," Journal of Applied Business and Economics, Vol. 22, Iss.12, pp. 225-244
Article Type: Research paper
Publisher: North American Business Press
Abstract:
This paper investigates the impact of macroecfonomic (external and internal) and political variables on returns of the Ghanaian and Nigerian stock markets. The study employed the Fully Modified Least Square and Dynamic Least Square models to ensure that the results are efficient, robust and reliable. Whilst lag of stock market returns and real gross domestic product exert positive effect of stock market returns, the effect of treasury bills, consumer price index and exchange rate are negative. Crude oil prices, LSE all share index and political cycle give diverse results. The study indicates that a key driver of stock market return is its lag. Policy direction that consistently aims at developing and implementing sound, stable and sustainable macroeconomic environment to promote stock market performance was recommended.