The consequences of online information dissemination on stock market liquidity and efficiency: Implications on African markets

Mlambo, Chipo and Biekpe, Nicholas (2003): The consequences of online information dissemination on stock market liquidity and efficiency: Implications on African markets. Published in: African Finance Journal , Vol. 5, No. 2 (November 2003): pp. 44-62.

Abstract

From the Efficient Market Hypothesis, a market is efficient if security prices fully and correctly reflect all available information that is relevant for the stock’s pricing. This requires a medium of information dissemination and transaction ordering with both speed and accuracy. This paper chronologically presents arguments in favour of the internet as one such medium. The internet has also enabled the transmission and archiving of bulky information in a ready-to-use format. And abnormal returns are now quickly observed and arbitraged away to non-existence. Using correlation analysis, we find a positive relationship between the internet and some stock market development indicators.

• Item Type: MPRA Paper
• Language: English
• Keywords: Efficient market hypothesis; internet; online information; stock market; development indicators; Africa
• Subjects: G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency ; Event Studies ; Insider Trading; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes

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