Abstract
This study investigated the impact of stock market development (SMD) on economic growth (EG) among emerging markets and developing economies (EMDEs) in Asia. The data sample includes eight Asian EMDEs (China, Indonesia, India, Sri Lanka, Malaysia, the Philippines, Thailand, and Vietnam) from 2008 to 2019. These countries share several similarities, so this ensures reliability of the results. Regarding the analysis, the generalized method of moments (GMM) is used for the estimation. The results show that SMD exerts a positive impact on EG. This finding confirms the importance of SMD in improving efficient capital accumulation and allocation, and also allows investors to reduce risks and increase liquidity, which will boost EG. Further, the significant influence of domestic credit (DC), control of corruption (CC), and inflation (INF) on EG is also highlighted. These findings are valuable empirical evidence that greatly contributes to reinforcing the suitability of classical economic growth theories, especially the theory of endogenous growth. They are also essential to EMDEs in Asia. Accordingly, the EMDEs should develop effective policies to improve the stock market’s scale, which contributes substantially to the development of EG. Moreover, these economies need to pursue many appropriate policies in sync, such as stimulating SMD, improving governance effectiveness and implementing effective macroeconomic policies. Acknowledgment This study was funded by the Industrial University of Ho Chi Minh City (IUH), Vietnam (grant number: 21/1TCNH01).
Highlights
The impact of stock market development (SMD) on economic growth (EG) is an interesting topic that has been mentioned in some empirical studies
This study investigated the impact of stock market development (SMD) on economic growth (EG) among emerging markets and developing economies (EMDEs) in Asia
This study examines the impact of SMD on EG in Asian EMDEs over the period 2008–2019
Summary
The impact of SMD on EG is an interesting topic that has been mentioned in some empirical studies. Schumpeter (1911) was the first to investigate the Asia, few studies have considered the impact of effect of financial development on EG. Impact was examined by McKinnon (1973), Shaw and Setiawan et al (2020) found a positive effect (1973), Rousseau and Wachtel (2000), Xu (2000), of SMD on EG in Asian countries Even Demirguoc-Kunt and Levine (1996) and Pan and without the stock market, the credit market can- Mishra (2017), have reported a negative impact not operate well (Cho, 1986).
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
