The Ethiopian Securities Exchange (ESX): A Review of Global Best Practices and Policy Lessons

Dr. Abera Bayisasahu
Assistant Professor of Finance, Department of Accounting & Finance, Debre Berhan University, Debre Berhan, Ethiopia

Dr. Amare Werku
Assistant Professor of Business Leadership, Department of Management, Debre Berhan University, Debre Berhan, Ethiopia

Abstract

This review article provides an extensive analysis of global stock market best practices in the establishment, operation, and growth of securities exchanges and derives market-related policy-relevant lessons for the Ethiopian Securities Exchange (ESX). Using a narrative and integrative article review methodology, the review synthesizes stock market-related academic literature, international market regulatory standards, and practical market experiences from well-developed, emerging, and frontier markets. The review article is organized around the main aspects of stock exchange development, including market regulatory governance, stock market-related infrastructure, financial investor protection, market liquidity formation, financial product sequencing, market transparency, modern technological adoption, international market integration, market sustainability, and institutional capacity building. The analysis greatly emphasizes market regulatory credibility, gradual institutional market sequencing, and context-sensitive adoption of state-of-the-art technology as critical success factors in emerging economies. By aligning global stock market evidence within Ethiopia’s evolving financial markets and institutional context, the review article provides a practical roadmap for market policymakers, market regulators, and market participants by contributing to the developing local literature on capital market development.

Keywords: Global best practices; Ethiopian Securities Exchange; frontier markets; narrative review; capital market development