What is it about?
Stock market participation, foreign investments, stock market development, economic growth, Fiji, SPXThe study findings partially confirmed the findings of previous studies. The findings that economic growth promotes SMD while inflation is negatively correlated to SMD were consistent with previous findings. However, the finding that regulatory quality and banking sector development have negative impacts on SMD was contrary to the findings of previous studies. Many determinants, which have been shown to have significant impact on SMD in other studies, did not show any significant impact on the South Pacific Stock Exchange (SPX) in the Fijian context, particularly the impact of stock market liquidity. We argue that the concentration of ownership and market disintegration hamper the market liquidity resulting in the current sluggish status of the SPX.
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Why is it important?
Stock market participation triggers economic development through increased investments providing financial capital for new projects. These findings are useful for financial regulators in designing policies and strategies for stimulating the financial market in Fiji, especially the SPX.
Perspectives
A critical review of the South Pacific Stock Market (SPX) provides very important information to regulators and policy formulators in Fiji. A mixed-method approach was employed: Autoregressive distributed Lag bounds testing framework was used to estimate the influence of the structural determinants in Fiji while descriptive and narrative analysis was used to explain the status of the SPX.
Professor Candauda Arachchige Saliya
Sri Lanka Institute of Information Technology
Read the Original
This page is a summary of: Stock market development and nexus of market liquidity: The case of Fiji, International Journal of Finance & Economics, December 2020, Wiley,
DOI: 10.1002/ijfe.2376.
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