Determinants of the West African economic and monetary union's banks going-public decision: empirical evidence on the role of macroeconomic factors

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Résumé

This research seeks to investigate the determinants of the going public decision in the banking industry by looking at the macroeconomic factors. For this purpose, we resort to a vector error correction model (VECM). Empirical findings indicate that in the West African Economic and Monetary Union, inflation, interest rate and stock market index return are the main factors that explain banks decision to go public. Moreover, findings show that GDP Granger causes the IPO decision. In the light of these findings, it is therefore essential that WAEMU, through its monetary institution, continue to work towards controlling price stability. The authorities also need to make efforts to improve national wealth.

Mots-clés

go public; macroeconomic factors; WAEMU; banks; BRVM