Sub-Saharan Africa’s peculiar financial market structure: the adverse effects of macroeconomic fundamentals?

This study investigates whether sub-Saharan Africa’s anomalous financial market structure is due to adverse macroeconomic fundamentals. To this end, it uses comparative statistics to derive a novel analytical framework to first characterize an ideal structure and later explore the features of an aberrant system. In its subsequent empirical analysis that employs panel quantile regression, the paper affirms that the sub-region’s macroeconomic fundamentals mostly explain the mentioned aberration in a nonlinear manner. The paper’s two key contributions are its novel analytical framework and application of a panel quantile methodology to consider the relation between the regressand and regressors.