Equity market development in the Middle East and North Africa (MENA) region. An empirical analysis

Abstract

The objectives of this thesis are (i) to clarify the mechanisms uniting equity markets and economic development and (ii) to analyze the equity market development process in the Middle-East and North Africa (MENA) region. It is composed of seven chapters. The introductory chapter sets out briefly to evoke the current development of emerging market finance research and attempts to situate our contribution within current knowledge. The second chapter constitutes an overview of the theoretical and empirical mechanisms associated to equity market development policies. Overall, conclusions from this literature review suggest that the domestic development and international integration of equity markets have dissociated effects. At an internal level, policies seeking to maximize the growth-enhancing impact of equity markets should focus on reaching and maintaining adequate levels of institutional transparency. However, the optimal degree of international integration depends on a trade-off between cheaper capital and financial stability. These conclusions are summarized in an 'equity market development triangle'. The empirical part of this thesis seeks to comparatively situate the MENA countries within this figure by undertaking a set o f complementary investigations.