An Impact of ICT on the Growth of Capital Market-Empirical Evidence from Indian Stock Exchange

This paper examines the impact of ICT on the growth of the Indian Stock Exchange using a modified version of the Gompertz technology diffusion model introduced by Chow (1983) and therefore rearranges the model such that ICT development becomes the independent variable while stock market growth indicators are the dependent variables. Capital markets have become excessively volatile since the adoption of computer assisted trading strategies as the latter increase short-term price volatility and risks. Fama and French (1988) argued that information technology have made capital markets more efficient as attendant stock prices now reflect important information and investors’ perception of stocks more swiftly. The data in the present study is obtained from BSE and NSE stock exchanges database, MCX India database, Securities and Exchange Commission and websites of World Development Indicators. In the course of analysis, market capitalization model, stock market value traded model, stock market volume traded model, turnover model, number of securities listed model, public sector bond model and private sector debt model has been designed. The results disclose that selected variables are significantly affected by information and communications technology especially in respect of increase in the number of stockbrokers, investors and access to ICT. Information Technology have contributed to growth of the Indian Capital Market, with the effect mostly seen in the availability of information to investors and the improvements in the trading patterns of the Indian Stock Exchange. Keywords: Indian stock market, ICT, Gompertz model, macroeconomic variable

The Impact of Information Technology on Global Capital Market Operations: A Critical Appraisal of Some Selected Developed and Emerging Markets

This study evaluates the impact of information technology on global capital markets operation with particular reference to the equity markets using a simple percentage and multiple regression analyses. Technology has fundamentally changed the landscape of the global financial market place by lowering transaction costs and thus leveling the playing field for investors and issuers. The data in the present study were collected from WFE, IMF, WEO from 2001 to 2010 for some selected developed and emerging markets, and through the use of a structured questionnaire. Equity market developments and its indicators as a whole were regressed against ICT developments indicators (i.e. telecommunication industry, internet technology, computer and regulatory industry and cloud computing technology). Using equity markets development as a dependent variable, the results disclose that ICT development indicators were all correct and positively signed. Information Technology have contributed to the growth of the global equity markets, with the effects mostly reflected in the aggregates of the equity markets indicators. Keywords: ICT, Market, transaction, investors, cost, operation, market, developmen

Financial Intermediaries and Capital Market Development in Nigeria

This study investigates the impact of financial intermediaries on capital market development in Nigeria employing co-integration. To capture the activities of financial intermediaries, five proxies were used to explain financial intermediaries which include credit to the private sector to GDP, broad money supply and total bank savings while on the other hand, market capitalization was used to capture capital market development covering the period of 1981 to 2016. The result revealed that in the long run, credit to private sector and money supply will lead to an increase in capital market development while banks total savings and government expenditure results to a decrease in capital market development in the long run. The study recommends that the Central Bank of Nigeria should ensure that the domestic credits provided by the banking sector are directed into their appropriate uses and government expenditure be directed to productive sectors and recurrent expenditure be reduced by government. Credit facilities should also not be restricted to the large-scale manufacturing industries only, but it should also be extended to small and medium scale enterprises

Capital Structure and Profitability of Downstream Oil and Gas Firms Listed in Nigeria

The Nigerian downstream oil and gas sector in the last few years have witnessed a plethora of challenges such as infrastructural decay, rising cost of importation of petroleum products (fuel, diesel, aviation fuel and kerosene) which is a fallout of breakdown of the nation’s refineries. The study examined the impact of capital structure on the profitability of firms in the downstream sector of the oil and gas industry in Nigeria from 2000 to 2018. This study adopted an ex-post facto research design. The study employed a dynamic panel system equation of generalized method of moment. Secondary data were sourced from the annual reports of the 8 selected oil and gas companies listed in Nigeria. The study applied descriptive statistics, correlation, and unit root test as well as inferential statistics. Inferences were made at 5 percent significant level. Results showed that Debt Capital ratio had a negative and significant relationship with ROA (β = -0.0257, t=-5.147, p<0.05). Also, Equity Capital ratio had a positive and significant relationship with current ROA (β = 0.228, t=5.3015p<0.05). Lastly, Interest Rate had a positive and insignificant relationship with current ROA (β = 0.247, t=4.3521, p<0.05). The study concluded that while debt capital ratio had a significant inverse effect on firms’ profitability, equity capital ratio had a positive and significant effect on the profitability of the selected oil and gas firms. The result also affirmed that interest rate had a positive and insignificant effect on profitability of selected oil and gas firms. The study recommended that Oil and Gas sector should increase equity financing and reduce debt financing. This equity can be enhanced through increased in the amount of ploughed back profit/retained earnings and bonus issue. Word counts: 281 Keywords: Capital Structure, Profitability, Equity capital ratio, Debt Capital ratio DOI: 10.7176/RJFA/11-8-02 Publication date: April 30th 202

Information and Communication Technologies, Market Rigidities and Growth: Implications for EU Policies

The renewed Lisbon strategy puts special emphasis on the potential role that Information and Communication Technologies can play in meeting the challenges of boosting growth, competitiveness and cohesion throughout the EU. There is also a general understanding among policy makers that investment of this kind and its related economic benefits can only materialize if labour, capital, product and service markets are flexible enough to facilitate ICT investment and the re-organisation of economic activities. This paper provides evidence of the influence of market rigidities on the propensity to invest in ICT and on the economic return of ICT investment in a number of EU countries, and in the US and Japan. We provide evidence that indicates that market rigidities deter ICT investment and lower the impact of ICT on GDP growth by considering a number of indicators reflecting barriers to business creation and the degree of market regulation in labour and capital markets. These results are invariant, even when other potential determinants of ICT investments and ICT contribution to GDP growth such as the degree of specialisation in ICT-producing industries, past ICT investment, business cycles conditions and a measure of trade openness are controlled for. The paper provides a number of policy implications, most notably, regarding the role played by structural reforms in promoting both ICT adoption and setting the best framework conditions for ICT impact on GDP growth. While the renewed EU Lisbon strategy of economic reforms is badly needed to increase EU growth potential, we show here that this strategy is also needed to promote technological change in the EU economy.Information and Communication Technologies, ICT, Growth, European Union, Lisbon Strategy

Understanding the digital divide: A literature survey and ways forward

The term digital divide was introduced in the mid-1990s and defined as the gap separating those who have access to new forms of information technology from those who do not. The digital divide remains an important public policy debate that encompasses social, economic and political issues. This paper presents a literature review and classification scheme for digital divide research. The review covers journal articles published between 2001 and 2010 in three types of journals: (1) Information technology & information systems, (2) Economics and business & management and (3) Social science. A classification of digital divide literature and a comprehensive list of references are provided. The results show that the digital divide is a multifaceted phenomenon, due to the many dimensions of determinant factors. Recent studies have included socio-economic, institutional and physiological factors in order to gain a greater understanding of the digital divide. Among other findings, they show that technological determinism is not sufficient to explain the emergence of the digital divide. Moreover, several types of technologies were investigated, both from empirical and conceptual standpoints. The Internet is the most commonly studied technology. The divide in access and usage are discussed at the global, social and democratic levels by employing a quantitative method, either a survey or data analysis, as the main method. However, there is less discussion in developing countries and at the level of the organization (i.e. SMEs, the private sector and the public sector). The qualitative research method could be seen as a complementary method to fill the gap in the current research. The choice of policies which have been recommended to the policy maker and national regulatory agency (NRA) are also presented and discussed at the end of this paper. Several initiatives made at the country and regional levels and by international organizations have also attempted to create a combined policy. This may suggest that the combined policy is the current trend among digital divide policies. Therefore, there is a need for future research to examine these determinants through the context of global, social and democratic divides. The results would provide some insight into how diverse people in different areas adopt ICTs. --Digital divide,Literature review,Future research

Finance and the Diffusion of Digital Technologies

The paper examines how different dimensions of financial development have influenced firms’ willingness to adopt new digital technologies (IT). To do so, it introduces an econometric analysis based on an Error Correction Model run over a panel of fifteen industrialized countries. The results point to the importance of stock market development and suggest that market-based systems encourage digital investments better than bank-based ones. The evidence is consistent with theories that stress the effective selection of projects carried out by stock markets and the positive role that new financial tools traded within these markets had on IT adoption.digital technologies, financial structure, cointegration

Development Financier, Diffusion des Tic et Croissance Economique dans les Pays de L’uemoa

L’objectif de ce papier était d’analyser le rôle de la diffusion des TIC dans l’analyse de la relation entre le développement financier et la croissance économique dans les pays de l’UEMOA en mettant un accent particulier sur leurs interactions. A partir d’un échantillon de 7 pays de cette zone,  sur la période 1997 - 2019, et suite à l’utilisation d’une approche Pooled Mean Group (PMG) sur données de panels, les résultats montrent qu’à long terme, l’effet direct du développement financier sur la croissance économique est significativement négatif dans les pays de l’UEMOA. Secundo, la relation directe entre la diffusion des TIC (mobile et l’Internet)  et la croissance économique a un effet positif et significatif. Enfin, l’interaction entre développement financier et la diffusion des TIC est significativement positif, prouvant ainsi que les pays de l’UEMOA ne peuvent bénéficier du développement financier qu’une fois qu’un seuil de diffusion des TIC atteint. Ce seuil de diffusion des TIC est respectivement de 168,7% et 38,1% pour le mobile et l’Internet.   The objective of this paper is to analyze the role of ICT diffusion in the analysis of the relationship between financial development and economic growth in WAEMU countries with particular emphasis on their interactions. From a sample of 7 countries in this area, over the period 1997 - 2019, and following the use of a Pooled Mean Group (PMG) method on panel data, the results show that in the long term, the direct effect of financial development on economic growth is significantly negative in WAEMU countries. Second, the direct relationship between ICT diffusion and economic growth (mobile and Internet) has a positive and significant effect. Finally, the interaction between financial development and ICT diffusion is significantly positive, thus proving that WAEMU countries can only benefit from financial development once a threshold of ICT diffusion reached. This ICT diffusion threshold is respectively 168.7% and 38.1% for mobile and Internet

Development Financier, Diffusion des Tic et Croissance Economique dans les Pays de L’uemoa

L’objectif de ce papier était d’analyser le rôle de la diffusion des TIC dans l’analyse de la relation entre le développement financier et la croissance économique dans les pays de l’UEMOA en mettant un accent particulier sur leurs interactions. A partir d’un échantillon de 7 pays de cette zone,  sur la période 1997 - 2019, et suite à l’utilisation d’une approche Pooled Mean Group (PMG) sur données de panels, les résultats montrent qu’à long terme, l’effet direct du développement financier sur la croissance économique est significativement négatif dans les pays de l’UEMOA. Secundo, la relation directe entre la diffusion des TIC (mobile et l’Internet)  et la croissance économique a un effet positif et significatif. Enfin, l’interaction entre développement financier et la diffusion des TIC est significativement positif, prouvant ainsi que les pays de l’UEMOA ne peuvent bénéficier du développement financier qu’une fois qu’un seuil de diffusion des TIC atteint. Ce seuil de diffusion des TIC est respectivement de 168,7% et 38,1% pour le mobile et l’Internet.   The objective of this paper is to analyze the role of ICT diffusion in the analysis of the relationship between financial development and economic growth in WAEMU countries with particular emphasis on their interactions. From a sample of 7 countries in this area, over the period 1997 - 2019, and following the use of a Pooled Mean Group (PMG) method on panel data, the results show that in the long term, the direct effect of financial development on economic growth is significantly negative in WAEMU countries. Second, the direct relationship between ICT diffusion and economic growth (mobile and Internet) has a positive and significant effect. Finally, the interaction between financial development and ICT diffusion is significantly positive, thus proving that WAEMU countries can only benefit from financial development once a threshold of ICT diffusion reached. This ICT diffusion threshold is respectively 168.7% and 38.1% for mobile and Internet