Stock Market Development Research Articles

The Threshold Effect of Regulatory Quality on the Relationship between Financial Development and Economic Growth: Evidence from Asian Countries

Abstract This study aims to provide new insights on examining whether regulatory quality influences the relation between financial development and economic growth by applying a nonlinear panel smooth transition regression (PSTR) model. Using the data from Worldwide Governance Indicators (WGI) to assess the soundness of regulatory quality, this paper finds that the relationship between financial development, including life insurance and stock markets, and economic growth is significantly positive in the countries with relatively better regulatory quality. Our findings not only indicate that sound regulatory quality could encourage the growth effect of life insurance and stock market sectors but also have far-reaching practical implications for other economies to realize regulatory quality should matter for the development of economic growth. JEL classification numbers: E44, G22, O11, O47, P34. Keywords: Regulatory quality, Life insurance development, Stock market development, Economic growth, Nonlinear panel smooth transition regression (PSTR) model.

ПРОБЛЕМЫ И ТЕНДЕНЦИИ РАЗВИТИЯ ФОНДОВОГО РЫНКА РОССИИ

The article is devoted to the research analysis of the current patterns of development of the domestic stock market. An assessment of the dynamics of the stock market volumes is given. The trends in the movement of the market value of shares of Russian companies and the influence of factors on this process are analyzed. A comparative analysis of the dynamics of the stock market in Russia and the USA is carried out. We also raised the issue of the development of economic relations in Russia characterized by the creation of an effective and transparent mechanism for the formation and distribution of financial resources between economic entities in accordance with market rules and laws. One of these generating and redistributing channels should be the securities market, as an integral part of ensuring the integrity and functioning of all elements of the economic system of the state. In conclusion, it was concluded that the main goal of the Russian market is its transformation into a productive mechanism for reducing the uncertainty of financial activity, which is based on the implementation of an appropriate active state policy

The Impact of Stockmarket Development on Economic Growth in Singapore. Econometric Study Based on an Autoregressive Distribution Lag (Ardl) Model Covering the Period From 1990 to 2020

The main objective of this paper is to discuss and examine the relationship between the development of stock market and economic growth and to show if the economic growth is positively influenced by stock market development in Singapore. Theoretically, some economists postulate a bidirectional relationship between financial development and economic growth, while others consider that growth drives finance, but that financial development is only a minor growth factor. We used an econometric study based on an autoregressive distribution lag (ARDL) model covering the period from 1990 to 2020 which is supported by the Asian financial crisis of 1997, obtained from various sources, in particular World Bank data and International Monetary Fund reports. Economic growth is expressed by GDP per capita, while stock market development is measured by market capitalization of domestic listed companies (% of GDP), shares traded total value (% of GDP) and stocks traded turnover ratio of domestic shares (%). The results show that the capitalization of domestic listed companies and the turnover ratio of domestic stocks have a positive and significant effect on gross domestic product per capita in the short and long run. However, shares traded total value hasa negative impact on gross domestic product per capita in short and long term. The contribution of our results suggests that stock market development promotes short and long-run growth in Singapore. Our findings can be of direct value to developed or emerging countries while they are of indirect value to less developed economies that may be committed to certain policy or regulatory decisions.

The Causality Between Stock Market Development and Economic Growth: Evidence from Arab Countries

The interaction between the stock market and the real economy is important in the various channels through which financial markets contribute to economic growth. This paper examines the nexus between stock market development and economic growth for tree Arab countries namely Egypt, Morocco and Tunisia. This study uses linear and nonlinear causality tests to investigate the relationship between stock market development and economic growth. The findings of the linear model show unidirectional causation between economic growth and market capitalization for Tunisia. Concerning Egypt and Morocco, there is a bidirectional causality between market capitalization and economic growth. The nonlinear causality test findings confirm the results of linear test. A significant bidirectional nonlinear causality between the two variables is detected for the three countries under investigation. This results indicates that stock market development improves economic growth in these countries. As a result, the governments of these countries should develop their stock markets by simplifying procedures and removing restrictions on the introduction of new firms to the stock exchange. Such a move might increase the size, liquidity, and activity of the stock market, so stimulating growth in the region.

Financial development and economic growth in Malaysia: a nonlinear ARDL application

Determining the relationship between financial development and economic growth is important to make precise projections of economic growth. As most of these studies rely on a symmetric relationship, they can lead to misleading policy implications. To overcome this shortcoming, this paper uses a technique involving an asymmetric relationship. This paper examines the asymmetric relationship between financial development and economic growth in Malaysia from 1980 to 2017 using a nonlinear autoregressive distributed lags model. The banking sector and stock market development have been employed as indicators of financial development. The findings suggest that the asymmetric relationship between banking sector development and economic growth exists in the long-run. Banking sector development shows no asymmetric relationship with economic growth in the short-run, while stock market development does not present any asymmetric relationship with economic growth in the short and long-terms. The study infers that the banking sector development is an essential engine of growth promotion. Policymakers should consider banking and stock market development for better policy decision-making.

ПОКАЗАТЕЛИ, ВЛИЯЮЩИЕ НА ФОНДОВЫЙ РЫНОК В РОССИИ, И РЕГУЛИРОВАНИЕ ЕГО РАЗВИТИЯ

The need to establish factors and indicators immediately affecting the Russian stock market is caused by the fact that the stock market has a significant impact on the economic development of the state. The paper focuses on the factors and indicators that can affect the domestic stock market development. The author used correlation and regression analysis to assess the impact on the stock market development in Russia of such indicators as the number of credit institutions, the number of citizens who opened brokerage accounts at the Moscow Stock Exchange, the number of financial pyramids. To exclude speculative transactions, usually involving shares and negatively affecting the development of the securities market, the volume of debt securities issuance was chosen as an indicator characterizing the stock market development. It is proved that the most significant indicator affecting the activity of issuers in Russia when issuing debt securities is the investment activity of citizens at the Moscow Stock Exchange (the number of brokerage accounts opened annually). The author gives recommendations on the securities market development and regulation in Russia, including the need to expand tax benefits (in addition to the benefits extended to individual investment accounts) for transactions of individuals with securities at the organized stock exchanges; it is recommended to continue the systematic work of authorities and other institutions to improve the financial literacy of the population. The concept of a financial supermarket has been developed based on the use of financial engineering and technological and informational infrastructure of the Gosuslugi.ru website. According to it, investors determine the parameters for issuing securities, while issuers retain the right to choose from the proposed options.

Stock Market Development

Stock Market Development

Corruption and Stock Market Development: Developing vs. Developed Economies

Corruption and Stock Market Development: Developing vs. Developed Economies

West African Emerging Economies: Comparative Insights on Ghana’s and Nigeria’s Stock Market Development

West African Emerging Economies: Comparative Insights on Ghana’s and Nigeria’s Stock Market Development

The Impact of Financial Development on the Cost of Capital: Evidence from Pakistan

This study adds to the body of knowledge by empirically examining how financial development affects the level of cost of capital of the firms listed on the Pakistan Stock Exchange. This paper applies pooled regression model to the panel data of 150 non-financial firms listed on the Pakistan stock exchange from 2005 to 2017. The aggregate index of financial development and the two sub-indices namely financial market development and financial institutional development are used as measures of financial development; however, the weighted average cost of capital (WACC) is used as a measure of the cost of capital. We found that the cost of capital is likewise inversely correlated with financial development. Our study confirmed that financial market and institutional development are also very negatively correlated with the weighted average cost of capital. These results imply that the level of financial development in the country lowers the average cost of financing as financial development improves governance mechanism, reduces information asymmetry, and risk diversification, mitigates economic uncertainty, and promotes liquidity provisions through stock market development. The empirical evidence of this research is potentially helpful to corporate managers, financial analysts, investors, and policymakers

Economic Policy Uncertainty Shocks and Chinese Stock Market Volatility: An Empirical Analysis with SVAR

This paper proposes a framework for examining the interaction between stock market volatilities and economic uncertainty shocks, aiming to understand better the influence of economic uncertainty shocks on the Chinese stock market. The major empirical results include the followings. First, the economic policy uncertainty shocks push the Chinese stock volatility up, increasing the market risk. A 1‐standard‐deviation shock of economic policy uncertainty will enhance the stock volatility of the two composite indices by approximately 7% in 12 months. Second, the stock volatility reacted more intensely to fiscal and monetary economic policy uncertainty shocks, with a 1‐standard‐deviation shock that can enhance the stock volatility of the two composite indices by more than 10% in 12 months. Third, different stock indices exhibit different patterns of cumulative impulse responses, and the reaction of the volatility of the SSE real estate index to economic policy uncertainty shocks is more significantly intense than other indices. Besides, we have proved the robustness of empirical results by reestimating the models with a lag order of 2. Overall, our research results can provide policy and managerial insights for the sustainable development of the Chinese stock market and beyond.

Особливості формування системи захисту пенсійних активів накопичувальних пенсійних програм

European countries widely use multi-level pension systems, and Ukraine has also gone the way of building a three-level pension model. The use of funded pension programs is associated with the need to create a system of preservation and protection of their pension assets from the manifestations of various risks. The article aims to reveal the peculiarities of the formation of the system of protection of pension assets of accumulative pension programs and to determine the state's role in improving its reliability and efficiency. In Ukraine, the state has a key role in shaping the protection system of pension assets of funded pension insurance. However, the level of protection of pension assets of participants in funded pension programs in the private pension system is insufficient. The main measures for the protection and preservation of pension assets were analyzed. Particular attention is paid to the characteristics of guarantees for the protection of pension assets of the second and third levels of the pension system of Ukraine by the state and its financial institutions. These should include: state control over the preservation and use of pension assets, investment policy to attract financial resources of funded pension insurance in the stock market, promote the development and expansion of the national stock market, disclose information on changes in the value of pension assets and reporting on them, regulation of remuneration of financial institutions servicing pension assets. Issues related to the tax regulation of pension savings were analyzed. Among the options for tax benefits is proposed one that provides that pension benefits are not taxable. The investment income of participants in funded pension programs and their contributions are also exempt from taxation. A set of measures for forming a reliable and effective system of protection of pension assets of funded pension programs was proposed.

A critical analysis of challenges relating to working capital financing towards SME profitably

SME funding is the financing of small and medium-sized businesses, and it is a key purpose of the general corporate financial economy, in which investment for various kinds of enterprises is provided, obtained, and budgeted or valued. Working capital (WC) is a profitability ratio that reflects the functioning cash flow available to a company, institution, or other entity, along with governments. Working capital is regarded as an integral part of capital reserves, along with fixed assets such as plants and tools. Total assets are equivalent to the total capital investments. In both industrialized and developing economies, small and medium-sized enterprises (SMEs) are viewed as stock market development engines. The significance of these businesses is mainly ascribed to their important contribution to increasing employment, rising Gross domestic product, and advancing company. SMEs face many obstacles, including problems arising from poor money-related administration, which are major causes of business setbacks in SMEs. From a strategic governance perspective, the objective of this research is to analyze the primary job of managing finances and recognize the financial planning strategies and obstacles impacting organizational effectiveness in SMEs. This research also looks at the importance and challenges of SMEs, as well as the links among both key Small and medium-sized implementation and financial planning strategies.  Numerous individuals assert that profit growth and cashflow must be balanced. Many research findings, nevertheless, had also concluded that successful Working Capital Management can boost profits. The findings, which seem to be rigorous to the appearance of unobserved heterogeneity, show that managers can create value by minimizing the time receivable accounts, and inventory levels are exceptional at their company. Similarly, reducing the cash flow enhances the firm’s financial performance. Thus, the research could analyze the impacts related to working capital financing towards SME profitability.

Asymmetric Linkages of Oil Prices, Money Supply, and TASI on Sectoral Stock Prices in Saudi Arabia: A Non-Linear ARDL Approach

This study examines the asymmetric effects of oil prices, money supply, and the Tadawul All Share Index (TASI) on sectoral stock prices in Saudi Arabia. By applying a nonlinear auto-regressive distributive lag (NARDL) approach to monthly data spanning from January 2007 to December 2016, we found that the positive shocks of oil prices were more than the negative ones in the building and construction, energy and utilities, and petrochemical sectors, while higher oil prices adversely influenced the stock price of the bank and financial service sector. We identified the long-run and short-run asymmetric relationships of the Saudi stock market development on the stock prices of bank and financial services, energy and utilities, and the petrochemical sector and only a long-running asymmetric relationship with the building and construction sector. We also found the absence of long-run and short-run asymmetric impact of money supply on three sectors, namely, building and construction, energy and utilities, and the petrochemical sector except for the bank and financial service sector where only a long-running asymmetric relation was observed. These findings are appropriate for investors and portfolio managers to make judicious investment decisions. Policymakers should diversify their economic sectors apart from the oil dependencies to achieve the Vision 2030.

ЎЗБЕКИСТОНДА ФОНД БОЗОРИНИ РИВОЖЛАНТИРИШ ЙЎЛЛАРИ

This article covers issues related to the development of the stock market of Uzbekistan, the current state of the stock market development, the share of the stock exchange in the trading volume of the securities market, its characteristics, the analysis of the development trends of this market.

MONETARY POLICY AND INDUSTRIAL SECTOR PERFORMANCE IN NIGERIA: MEASURING THE EXTENDED IMPACT ON THE ECONOMY

The study empirically investigates the impact of monetary policy shocks on the performance of the industrial sector in Nigeria, and how this affect the general growth performance of the economy in the periods 1980-2018. Monetary policy variables used were money supply (M2t), monetary policy rate (Mprt), Treasury bill rate (Tbrt) and Credit to the private real sector (Credt). We also gauged the system with other control variables like gross fixed capital formation (gcft), inflation (????t) and exchange rate (exr). Utilizing Vector Autoregression (VAR) and Generalized Method of Moments (GMM), we found that any unanticipated shock on monetary policy rate and money supply growth will produce falling impact on industrial sector output that is consistent with no sign of convergence throughout the period. However, shocks to credit supply and treasury bill rate produces positive growth outliers at different magnitudes in the industrial sector. We also found statistically significant pass-through effect of monetary policy from the industrial sector to the general economy of at least 30 percent growth effect. A number of possible policy menu capable of deepening monetary policy-industrial performance nexus in Nigeria in years following the study have been prescribed in the studyincluding improved stock market development, bond market development and other credit channels that easily linked policy to the private sector for seamless policy transmission.

Effect of Stock Market Development on Economic Growth: Case Study Egypt

Effect of Stock Market Development on Economic Growth: Case Study Egypt

Cointegration between Stock Market and Economic Growth: Evidence From Nepal

This paper examines the linkage between stock market development and economic growth in the context of Nepal using 33 annual observations from Mid-July 1988 to 2020 on economic and financial time series of real GDP, market capitalization and annual turnover. The study employs Engle-Granger(1987) and Johansen’s (1988) cointegration test to examine the cointegration between economic growth proxied by log of real GDP and stock market development indicators, namely stock market size and liquidity, proxied by log of market capitalization and log of annual turnover, respectively. The results of cointegration show that both stock market size and liquidity can predict economic growth in Nepal. The results of cointegration test from both Engle-Granger procedures and Johansen’s method suggests that economic growth is cointegrated with both stock market size and stock market liquidity, and hence they are interrelated with each other in the long run. The basic implication of study finding is that both stock market size and liquidity significantly predict the economic growth in Nepal over the sample period and hence there is a need for promoting secondary market trading both in terms of size and liquidity.

Prediksi Data Time Series Harga Penutupan Saham Menggunakan Model Box Jenkins ARIMA

The ability to predict time series data on closing market prices is critical in determining a company's stock results. The development of an efficient stock market has a positive correlation with economic growth, in a country both in the short and long term. In practice, investors tend to invest in countries that have a stable economy, low crime. The rise and fall of stock prices has made many investors develop various effective strategies in predicting stock prices in the future with the aim of making investment decisions so that investors can guarantee their profits and minimize risk.As a result, the researchers developed a model that could accurately estimate precision. Time series data models are one of the most powerful methods to render assumptions in decisions containing uncertainty. The AutoRegressive Integrated Moving Average (ARIMA) model with the Box Jenskins time series procedure is one of the most commonly used prediction models for time series results. The steps for using the Box Jenskins ARIMA model for historical details of expected stock closing prices are outlined in this paper. BBYB and YELO stock data from yahoo.finance were used as historical data. The Aikake Information Criterion (AIC), Bayesian Information Criterion (BIC) / Schawrz Bayesia Criterion (SBC), Log Probability, and Root Mean Square Error (RMSE) are used to choose an effective model, and the model chosen is ARIMA (1 , 1,2). The findings suggest that the Jenkins ARIMA box model has a lot of scope for short-term forecasting, which may help investors make better decisions. Keywords: prediction, the stock's current closing price, Box Jenskins ARIMA model

Do export diversification and stock market development drive carbon intensity? The role of renewable energy solutions in top carbon emitter countries

While examining the case of top-carbon emitter countries (TCECs), it requires underlining certain common but less explored variables that might have escalated carbon emissions significantly in the preceding years. In this light, we recognized the impact of export diversification, extensive export margin, intensive export margin, stock market development, renewable energy solutions, and income inequality on carbon intensity in the nine top-carbon emitter countries from 1990 to 2016. By using modern econometric procedures such as CIPS and CADF for stationarity, Westerlund test for cointegration, and CS-ARDL test for elasticity coefficients, we computed the temporal results. The long-run elasticity coefficients confirm that horizontal, vertical, and overall improvement in export-basket elevated the level of carbon intensity in the selected countries. Further, the increased size of stock market and income inequality led to an increase in carbon intensity; however, the increased usage of renewable energy contributed to reducing the level of carbon intensity. In terms of policy endorsement, we provided a multipronged framework, which may help these nations to restore air quality in the long run.