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Essays on investor behaviour and corporate governance in sub-Saharan African frontier markets

Komba, Gabriel Vitus


Gabriel Vitus Komba


Yilmaz Guney


This thesis consists of three essays that address the question, whether the dynamics of investing in the developed markets are applicable in the Sub-Saharan African (SSA) frontier markets following the emerging market’s experience. The first essay (chapter 3) explores the existence of herding behaviour among investors in a sample of 10 frontier markets. The study employs the cross-sectional absolute deviation (CSAD) test for detecting presence of herding behaviour. The findings reveal the presence of herd formation during the period under study in all markets. Furthermore, the evidence shows a non-existence of herding during periods of extreme market conditions. Moreover, the South African market does not seem to motivate herding in other African markets.

The second essay examines the impact of corporate governance practices of the East African Community (EAC) listed companies on performance. The present study employs the fixed-effects (FE) and the random-effects (RE) – two-stage least square – instrumental variable (RE-2SLS-IV) regression models to analyse data from a sample of 47 firms. The empirical investigation shows that the size of the board has a positive impact on market values but a negative effect on operating performance. The essay also documents that the largest investors, most of whom are strategic investors too, have an adverse effect on market values, whereas they have little or no effect on improving operating performance. The result also suggests foreigners and civil servants (or politicians) board members to impact positively on operating performance.

The third study is an examination of the influence of psychological factors on retail investors’ trading behaviour at the Dar es Salaam Stock Exchange (DSE). The study employed a survey approach. The main finding is that retail investors in the market are prone to several behavioural biases. Perceived trading knowledge and perceived experience, for example, affect both the trading frequency and portfolio diversification. The tendency to focus on attention grabbing stocks explains why retail investors at the DSE prefer domestic over foreign stocks and the extent of diversifying their portfolios. The tendency to exhibit the disposition effect is mainly explained by gender, extrapolation of past performance, and perceived competence.


Komba, G. V. (2016). Essays on investor behaviour and corporate governance in sub-Saharan African frontier markets. (Thesis). University of Hull. Retrieved from

Thesis Type Thesis
Deposit Date Nov 4, 2016
Publicly Available Date Feb 23, 2023
Keywords Business
Public URL
Additional Information Business School, The University of Hull
Award Date Jun 1, 2016


Thesis (3.3 Mb)

Copyright Statement
© 2016 Komba, Gabriel Vitus. All rights reserved. No part of this publication may be reproduced without the written permission of the copyright holder.

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