Title: Assessing the impact of capital market development, income level, and institutional quality on entrepreneurship in Africa

Authors: Habila Abel Haruna; Akuraun Shadrach Iyortsuun; Hyeladi Stanley Dibal

Addresses: Department of Banking and Finance, Federal University, Wukari, Nigeria ' Department of Business Administration, Federal University, Wukari, Nigeria ' Department of Banking and Finance, Federal University, Wukari, Nigeria

Abstract: Entrepreneurship development in Africa suffers from numerous challenges among which include lack of access to finance. Over the years efforts by governments of African countries seem not to yield much. Therefore, there is growing attention on the capital market as a potential source of entrepreneurship financing. In this study, we explored whether capital market development, income level, and institutional quality contribute to entrepreneurship development in Africa. The study used panel data from 12 African countries from 2006-2020. The panel ARDL was employed to investigate the homogenous long-run and short-run, and potentially heterogeneous dynamic effects across countries in the panel. The findings revealed the presence of a long-run relationship between capital market development, income level, and entrepreneurship in Africa. Our study also found an inconsistent outcome in the short-run relationship between income level and entrepreneurship in Africa. The major limitation of the study is the unavailability of data in many African countries which limited the scope of our study. The study contributed to the finance-growth theoretical debate by establishing the role of capital market development on entrepreneurship and also, the predictive role of capital market development, income level, and institutional quality on entrepreneurship development in Africa.

Keywords: capital market; entrepreneurship; finance-growth; income level; institutional quality; Africa.

DOI: 10.1504/GBER.2026.151145

Global Business and Economics Review, 2026 Vol.34 No.2, pp.157 - 177

Received: 13 Jul 2023
Accepted: 30 Dec 2023
Published online: 15 Jan 2026 *

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