Global Journal of Management and Business Research, B: Economics and Commerce, Volume 23 Issue 3

II. M ethodology This study is based on a cointegration regression in the West African zone during the period 1993 to 2020. The data to be analyzed are taken from the World Bank database (WDI). Three cointegration estimators will be used to test the causal links between economic growth, demography, and human capital. These will be the Fully Modified Ordinary Least Squares (FMOLS) estimator (Phillips and Hansen, 1990), Canonical Cointegration Regression (CCR) (Park, 1992), and Dynamic Ordinary Least Squares (DOLS) (Stock and Watson, 1993). These estimation methods overcome some of the limitations of the ordinary least squares (OLS) method. Indeed, these techniques deal with the problems of serial correlation and endogeneity that could arise in the presence of cointegration. a) Model Specification This study aims to analyze the integration of West African stock markets. Thus, unlike the economic literature, which uses stock market indices, we will use the market capitalization of domestic listed firms (% of GDP) as a proxy for the size of the financial market. Following Jacob and Littleflower (2022), we will use a linear regression model that will be specified as follows: WAEMUt = α 0 + α 1 + GHAt + α 2NGAt + ε t (1) With: WAEMU t , is the endogenous variable of the stochastic model. It represents the market capitalization of domestic companies listed on the WAEMU stock exchange; GHA t means the market capitalization of domestic companies listed on the Ghana Stock Exchange; NGA t means the market capitalization of domestic companies listed on the Nigerian Stock Exchange; ε t is the stochastic disturbance. III. R esults a) Preliminary Test Results Before conducting any statistical test, the quality of the quantitative data must be checked. In the context of this study, two tests are essential: the test for measuring multicollinearity and the descriptive statistics of the variables. Figure 1: Evolution of the Capitalization of Wes-19.00]t African Stock Markets Source: Prepared by the Authors based on the Results of the Eviews Software 0 4 8 12 16 20 24 28 32 36 94 96 98 00 02 04 06 08 10 12 14 16 18 20 WAEMU Ghana Nigeria 10 Global Journal of Management and Business Research Volume XXIII Issue III Version I Year 2023 ( ) B © 2023 Global Journals Cointegration and Interdependence of West African Stock Markets