The role of the Kazakhstan Stock Exchange in the economic development of Kazakhstan

Abstract

This article delves into the pivotal role of stock exchanges in spurring economic growth, focusing on their capacity to mobilize capital for businesses, foster investment and job creation, and enhance the efficiency of financial markets. Emphasizing the Kazakhstan Stock Exchange (KASE), this research illuminates its instrumental function in the economic advancement of Kazakhstan. By comparing data from prominent global stock markets, including the New York Stock Exchange, the analysis underscores KASE's potential to catalyze economic diversification and growth. Concentrating on the period between 2018 and 2022, this study scrutinizes the exchange's influence on crucial macroeconomic parameters such as GDP, inflation, and unemployment rates. Employing both a correlation matrix and linear regression analysis, the investigation evaluates the interplay between these economic indicators and stock market capitalization. The findings reveal a pronounced positive correlation between market capitalization and the inflation rate, indicating a substantial effect of the stock market on inflationary trends. Conversely, the relationships between market capitalization and both GDP and unemployment appeared minimal and statistically non-significant. These insights underscore the stock exchange's vital role in inflation management, albeit raising questions about its direct influence on GDP augmentation and unemployment mitigation. This examination underscores the critical significance of the Kazakhstan Stock Exchange in bolstering Kazakhstan's economic health, particularly regarding inflation control. The paper suggests that future research, possibly incorporating an expanded dataset or alternative analytical methodologies, could shed further light on these dynamics.