Introduction

Abstract

There has been a rapid growth in empirical studies of the characteristics of the financial system including the stock market (Islam and Oh 2003), an area of study broadly defined as empirical finance. Many financial concepts, theories, econometric methods and models have been developed to undertake these exploratory studies for both developed and developing countries for predictive and policy formulation purposes. However, the concepts, principles and models in finance are often derived from, and related to the special economic, institutional, and structural characteristics of developed economies. Therefore, the use of these financial theories and models in explaining the economic realities of nations should also be derived for and applied to developing countries.