Stock market development and economic growth in Ghana: an ARDL-bounds testing approach

Abstract

This article examines the relationship between stock market development and sustainable economic growth in Ghana. The study employs the recently developed ARDL-bounds testing approach and multidimensional stock market development proxies to examine this linkage. The article finds that in the long run, stock market developments and capital account liberalization policies have no positive effect on economic growth in Ghana. This finding supports the numerous past studies, which have reported negative or inconclusive results on the effects of stock market development on economic growth. The article, therefore, concludes that it is the increase in credit to the private sector, rather than stock market development that drives the real sector development in Ghana.