Abstract
Stock markets foster economic growth through meeting the fund requirements of the firms by individual and institutional investors. Pension funds and insurance companies with their long-term investment horizon are critical institutional investors in capital markets. Therefore, this article explores the effect of pension funds and insurance companies on stock market development in 15 emerging market economies over the 2004–2019 period through panel cointegration and causality tests. The causality analysis revealed that stock market development had a significant impact on pension funds and the insurance sector in the short term. However, the cointegration analysis revealed that pension funds had a positive effect on stock market development in Brazil, Chile, Hungary, Mexico, Peru, and South Africa and the insurance sector had a positive impact on stock market development in Chile, Indonesia, Korea Republic, Philippines, and South Africa in the long term.
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