The Effect of Institutional Quality and Capital Market on Unemployment in selected sub-Sahara African Economies
The Effect of Institutional Quality and Capital Market on Unemployment in selected sub-Sahara African Economies

Summary/Abstract: This study tests institutional quality and the growth-finance’ four-contexts hypotheses by investigating thenexus between institutional quality and capital market relative to labour market growth in seven selectedsub-Sahara Africa’s capital market economies comprising Nigeria, South-Africa, Mauritius, Kenya, Ghana, Coted’Ivoire and Zimbabwe. Overtime, the dearth of long-term capital and high unemployment have been in-imical to well-being of these economies. Perhaps, given the weakness of the market-mechanism in efficientresource allocation in developing economies, the neo-classists theorized integrated institutional-qualities intomarket reforms and freedom for capacity as probable antidote to market economic philosophy. The study ap-plied pooled mean group and generalized method of moment techniques to data obtained from the WorldBank Indicators from 1990 to 2020. It establishes that capital market, proxied by market capitalization inducesemployment generation while quality of institution exacerbates unemployment. The interaction betweeninstitutional quality and market capitalization however significantly reduces unemployment, which suggeststhat quality institution may be helpful impact to unemployment reduction. The study thus affirms institutionalquality hypothesis and finance led growth theory. The paper recommends market freedom, Governments andSecurities and Exchange Commissions should deeply liberalize the capital markets for higher citizens’ inclusiontowards industrial funding and high-quality job creation; listing requirement should be eased; capital trade-points established in semi-urban centers for market deepening and liquidity

• Details
• Contents