Colonial origins and growth of financial markets in Africa : a comparative analysis based on institutions

This paper studies the effect of settlement and mortality on the growth of African financial markets using the mediation of institutions over the period 1996-2017. A comparative result is based on two types of data bases. Firstly, the Acemoglu et al.'s (2001) database and the Albouy's (2006) database. Two samples including 29 for the settler mortality rate and 33 for the settler rate have been chosen. Applying ordinary least squares (OLS) regression, we find that institutions exert a negative and significant influence on financial market growth in African countries where settler mortality rates were high while in countries where settlers settled, the interaction effect of settler sedentarization rate and institutions is positive and significant. These results remain robust to several tests conducted. As a key recommendation, we suggest that African governments put in place new institutional governance policies that take into account the current economic context to further improve the growth of their financial markets.