Instituting Investor Capitalism In East Africa: Adoption And Utilization Of The Practice Of Shareholding In Kenya, 2006-08

Abstract

This dissertation studies the ongoing process of institutionalizing investor capitalism in Kenya's Nairobi Stock Exchange. The research is presented in three papers. The first paper studies active efforts by the state to recruit new investors through the use of mass advertising campaigns. The second paper studies investor entry into the market via a social diffusion process, where profits earned by geographically proximate and ethnically similar previous investors attract new investors. The third paper investigates how newly recruited, inexperienced investors utilize their shares after entering the market, focusing on rates of speculative trading. A unique, individuallevel dataset of investor behavior was constructed based on access to the Nairobi Stock Exchange's electronic clearing and settlement platform to which data from several national surveys was merged.