n African Finance Journal - The consequences of online information dissemination on stock market liquidity and efficiency : implications on African markets

Volume 5, Issue 2
  • ISSN : 1605-9786



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.

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