Estimating the Cost of Not Having a Stock Exchange: A Synthetic Control Approach

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F70883521%3A28120%2F22%3A63536838" target="_blank" >RIV/70883521:28120/22:63536838 - isvavai.cz</a>

Výsledek na webu

<a href="http://www.ijtef.com/index.php?m=content&c=index&a=show&catid=124&id=1108" target="_blank" >http://www.ijtef.com/index.php?m=content&c=index&a=show&catid=124&id=1108</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.18178/ijtef.2022.13.3.727" target="_blank" >10.18178/ijtef.2022.13.3.727</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Estimating the Cost of Not Having a Stock Exchange: A Synthetic Control Approach

Popis výsledku v původním jazyce

Despite the flourishment of the financial markets all around the world as a strategy of financial reforms in the last century, 20% of the world nations are still without a stock exchange. This study examines the economic cost of not having stock exchanges in one of the largest of these countries, Ethiopia. Using a transparent data-driven econometric technique - the synthetic control method (SCM), it estimates the counterfactual GDP per capita Ethiopia would have enjoyed, had it established stock exchange in 1998. Based on a weighted average of the preintervention characteristics and income per capita of similar countries with a stock exchange, SCM constructs synthetic control unit that imitates the characteristics of the treated unit in the pre-treatment period and compares the counterfactual outcome path against the actual outcome path of the treated unit. The estimation results indicate that the synthetically constructed Ethiopia outperformed actual Ethiopia in the posttreatment year, suggesting an establishment of a stock exchange in Ethiopia would have led to a substantial increase in income per capita of the country. Specifically, on average, Ethiopia’s GDP per capita would have been 54.84 percent higher over the period of 12 years had it established a stock exchange in 1998.

Název v anglickém jazyce

Estimating the Cost of Not Having a Stock Exchange: A Synthetic Control Approach

Popis výsledku anglicky

Despite the flourishment of the financial markets all around the world as a strategy of financial reforms in the last century, 20% of the world nations are still without a stock exchange. This study examines the economic cost of not having stock exchanges in one of the largest of these countries, Ethiopia. Using a transparent data-driven econometric technique - the synthetic control method (SCM), it estimates the counterfactual GDP per capita Ethiopia would have enjoyed, had it established stock exchange in 1998. Based on a weighted average of the preintervention characteristics and income per capita of similar countries with a stock exchange, SCM constructs synthetic control unit that imitates the characteristics of the treated unit in the pre-treatment period and compares the counterfactual outcome path against the actual outcome path of the treated unit. The estimation results indicate that the synthetically constructed Ethiopia outperformed actual Ethiopia in the posttreatment year, suggesting an establishment of a stock exchange in Ethiopia would have led to a substantial increase in income per capita of the country. Specifically, on average, Ethiopia’s GDP per capita would have been 54.84 percent higher over the period of 12 years had it established a stock exchange in 1998.

Druh

J_ost - Ostatní články v recenzovaných periodicích

CEP obor

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OECD FORD obor

50206 - Finance

Projekt

—

Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2022

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

International Journal of Trade, Economics and Finance

ISSN

2010-023X

e-ISSN

—

Svazek periodika

13

Číslo periodika v rámci svazku

3

Stát vydavatele periodika

SG - Singapurská republika

Počet stran výsledku

5

Strana od-do

71-75

Kód UT WoS článku

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EID výsledku v databázi Scopus

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