Impact Of Stock Market Development Research Articles

The impact of stock market development on economic growth in Turkey: ARDL analysis

The stock market has become more significant due to the globalization of financial markets, and there is a widespread perception that it propels economic growth. Nonetheless, some recent research has found that this effect differs throughout countries based on their financial infrastructures and degrees of development. In nations with established financial infrastructure and economic stability, the stock market aids in economic growth; nevertheless, it has no such effect in economies characterized by macroeconomic instability and uncertainty. Based on this, this study used quarterly data from 2006 to 2023 to examine the effects of Turkey's stock market development on economic growth using an autoregressive distributed lag (ARDL) method. The results show that while there was a negative and considerable short-term effect, stock market development in Turkey did not have a long-term detrimental impact on economic growth. According to the findings, for Turkey's stock market to positively impact economic growth, the country's financial system has to be modernized.

The Impact of Stock Market Development on Economic Growth a Case of Malaysia

The stock market is important among many financial markets. Stock Market Development is one of the enabling factors for Economic Growth. The recession crisis occurred a few times and badly affected Malaysia's Economic Growth (GDP) and Stock Market Development (SMD). Also, during the recent pandemic of COVID-19, there was a different reaction by investors and individuals overall towards the economy in Malaysia. There were inconsistent trends when the global recession in 2008 happened and COVID-19 started to spread in Malaysia for both SMD and GDP. This study aims to determine the relationship between SMD and GDP in Malaysia. Using Market Capitalization (MCAP) (as a proxy to (SMD)), Exchange Rate (EXC) and Trade Openness (TRADE) as independent variables and GDP as the dependent variable. Data from 1981 to 2020 is analyzed using Granger causality, and the ARDL method along with applying the Endogenous Growth theory. The findings of the ARDL long-run test suggested that SMD and TRADE have a positive and statistically insignificant relationship with GDP. EXC has a negative and statistically significant relationship with GDP. Granger causality test suggested a bidirectional relationship between EXC and TRADE with GDP. There is a unidirectional causality between SMD and GDP where GDP Granger causes SMD. To improve market regulation, The government should ensure the stock market is well-regulated and transparent, boost investor confidence, and increase market investment. Encouraging trade openness and exports can also help increase exchange rates and boost ringgit's demand.

The Impact of Stock, Market. On Economic. Growth: Evidence from Developed European.Countries

Abstract The purpose of the study is to investigate the impact of stock market development on economic growth for nine developed European countries. In many countries, the stock market (SM), is considered. one of the crucial elements for promoting sustainable economic growth and development. By analysing data from nine developed European countries over 21 years, from 2000 to 2020, including Germany, the United Kingdom, France, Italy, Spain, the Netherlands, Switzerland, Turkey, and Poland, this study seeks to determine the effect of the stock. market. on economic growth. The years 2021 and 2022 are not included due to the lack of data, mainly as a result of the pandemic period. The dataset, extracted from the World Bank database, is used to generate results by applying different econometric models such as OLS, OLS Robust, Fixed, and the Random Effect, which turned out to be more suitable in this study. According to research, macroeconomic factors such as stock. market development (SMD), and inflation (INF), have a significant positive impact while, domestic credit to the private sector (DC), has a negative significant impact on economic growth, in respective periods and countries. Therefore, new research on this topic could help better understand the stock market’s impact on economic growth, and new conclusions might greatly benefit developed European countries.

"The Study on the Impact of Capital Market on Economic Growth in Sri Lanka "

Stock market is an indicator of an economy financial health. It indicates the mood of investors in a country. As such, stock market development is an important ingredient for economic growth. The stock market is a common feature of a modern economy and is expected to promote economic growth and development of an economy. This paper examines the impact of stock market development on Economic growth in Sri Lanka using data over the period 2009 – 2013 monthly data (60 months data). The main objective of this study is to examine the impact of stock market development on Economic growth in Sri Lanka. Towards achieving the objective of this paper, the data on market capitalization, All Share Price Index and Turnover ratio are collected from the CSE Data Library; while that of GDP information has been compiled from the CBSL annual reports and publications. Where Capital Market is the independent variable and Economic growth is the dependent variable. The studies on the relationship between stock market development and economic growth have generally taken the market capitalization (MKT), All Share Price Index (ASPI), turnover ratio (TRN) representing the stock market development and gross domestic product (GDP) as an proxy for economic growth and it has generally examined the relationship between stock market development and economic growth by using Johansen-Juselius cointegration test, maximum eigen test and multiple regression. As the data was gathered, it was entered and used to EViews statistical package to analyses the data. This study found that stock market development has a positive effect on economic growth.

The impact of stock market development on economic growth in Morocco: An analysis using the VAR approach

The impact of stock market development on economic growth in Morocco: An analysis using the VAR approach

The Impact of Stock Market Development and Credit Market Development on Technological Innovation: An Empirical Study Based on Cross-Country Panel Data

Technological innovation is crucial to economic growth and social transformation. In the process of technological innovation, financial capital is indispensable. Accordingly, a country's stock market and credit market are extremely important in giving impetus to technological innovation. Thus, we construct a panel data model with interactive fixed effects to study the impact of stock market development and credit market development on technological innovation in countries at different levels of economic development. Results indicate that, whether for developed or developing and emerging market countries, the development of the stock market has a significant positive influence on national technological innovation (NTI), and the impact of the development of the credit market on innovation of different types of countries is quite different. In addition, foreign direct investment (FDI) inflow can increase the positive impact of stock market development on NTI, but this impact is not significant for the sample of developed countries.

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 impact of stock market development on economic growth: A GMM approach

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).

Examining the temporal impact of stock market development on carbon intensity: Evidence from South Asian countries

The growing size of stock market in the South Asian countries might have contributed to raising the level of industrial production and energy consumption. This upturned energy usage might have widened the scope for carbon emissions because these nations heavily rely on fossil fuels. In this milieu, therefore, in the present study, we assessed the impacts of stock market development, per capita income, trade expansion, renewable energy solutions, and technological innovations on carbon intensity in the four South Asia countries from 1990 to 2016. The empirical results based on the CS-ARDL approach revealed that stock market development, per capita income, and trade expansion invigorated carbon intensity in the South Asian countries. On the contrary, the increased usage of renewable energy solutions and technological advancement helped in reducing the energy-led carbon intensity. Further, the interaction of stock market with renewable energy, and subsequently with technological advancement delivered insignificant coefficients, which indicates the inefficacy of renewable energy and technological advancement in regulating stock market-led carbon intensity during the study period. Therefore, by considering the need for complementarity between economic growth and environmental targets, we proposed a multipronged policy framework, which may help the selected countries to attain the Sustainable Development Goals, with a special focus on SDG 7, 8, 9, and 13.

The impact of stock market on enterprise capital structure in ASEAN developing countries

Capital structure is one of the topics in which business managers as well as academics are always interested, because it has many important implications. This problem in developing countries is even more relevant due to the low level of financial development in these countries, leading to uncertain access to external capital by firms. This paper focuses on the impact of stock market development on capital structure in five developing countries in ASEAN, namely Indonesia, Malaysia, Philippines, Thailand and Vietnam, for the period 2010 - 2018. Stock market development is measured in four different ways: Stock market capitalization to GDP (MACAP), total value of shares traded to GDP (LIQ1), total value of shares traded to stock market capitalization (LIQ2) and average of the three indexes (STOCK). The results show that development of stock market has different impacts on capital structure, depending on the measures used to reflect the stock market development. Specifically, MACAP, LIQ2 and STOCK do not reach statistical significance, while LIQ1 has a negative effect. In addition, firm size (SIZE), tangible assets (TANG), growth opportunities (TOBINQ), inflation (INF) and GDP growth (GDPGR) positively affect capital structure; while firms' profit (ROA) has negative effect. Based on the research findings, the research offers several implications for relevant stakeholders.

The Impact of Stock Market Development on Economic Growth in Jordan

The strong development of stock markets is reflected in acceleration in the number of IPOs and a very sharp increase in transaction volumes (amounts of securities traded). To understand the effects of stock market development on Jordan’s economy, this research adopted the use of secondary time series info. Based on the descriptive statistics approach adopted, there are specific findings that define the overall objectives of the study. The findings show that the stock growth and private sector credit expansion optimistically contributes to the economic prosperity and development of the Jordanian economy. Moreover, the research findings also indicate that a foreign direct investment, which also influences the country’s stock, has an outcome on the country’s economic development in the long run. Further, the research findings also show that the economic development of Jordan is not affected by the domestic credit awarded to the private sector. However, the findings also show that trade involving stock has a minimal effect on the development and growth of the Jordanian economy. Overall, the research reveals that the FDI, the total stock value of trade, and the nationwide credit to the private sector have an influence on the economic growth of a country.

Impact of stock market, renewable energy consumption and urbanization on environmental degradation: new evidence from BRICS countries.

This study examines links between Morgan and Stanley capital Investment (MSCI), foreign direct investment (FDI), renewable energy, urbanization, and trade openness on environmental degradation in (Brazil, Russia, India, China, South Africa) BRICS countries. In this study, generalized method of moment (GMM) estimation is applied on a data set ranging from 1993 to 2018. Results illustrate that stock market index price (MSCI) has negative relationship on CO2 emissions in India, China, Russia, and South Africa and has positive relationship in Brazil. One possible reason for this is strong environmental regulations and their enforcement by Brazilian government. The study also finds that trade openness, FDI, and urbanization have a significant positive relationship on environmental degradation. The impact of stock market development on environmental degradation varies among BRICS countries. Our outcomes have significant policy implications. For example, the policy makers have to initiate effective strategies to promote the renewable energy sources to meet the increasing demand for energy by replacing the use of conventional energy such as coal, gas, and oil. This will help to reduce the CO2 emissions from fossil fuel and ensure sustainable stock market development in the BRICS nations. BRICS countries who have taken the initiative and formulated policies for businesses to conserve the environment play a positive role compared to those who do not.

Research on the Impact of Stock Market Development on Real Economic Growth in Nigeria

Research on the Impact of Stock Market Development on Real Economic Growth in Nigeria

English

English

Threshold effects in the relationship between financial development and income inequality

AbstractThis paper investigates the existence of nonlinearities in the relationship between financial development and income inequality, using the instrumental variable threshold regression introduced by Caner and Hansen in2004. It is shown, on the basis of cross‐sectional data of 60 developed and developing countries, that there is a significant financial development threshold effect in the finance–inequality nexus. Particularly, our findings are consistent with the Greenwood and Jovanovic hypothesis of an inverted U‐shaped relationship between banking sector development and inequality. However, there is no evidence for an inverted U‐shaped relationship between stock market development and inequality. Besides, our estimates lead to inconclusive results regarding the impact of stock market development on income distribution in low‐ and lower‐middle‐income countries. Our results show that under the lower regime, the weight of the market is very light and its contribution to income distribution does not matter, whereas under the higher regime, market expansion leads to more inequity.

Da li finansijski razvoj zasnovan na tržištu akcijama podstiče ekonomski rast na tržištima u nastajanju? Novi dokazi iz Nigerije

This study examines the effect of stock market development on economic growth in Nigeria. The study spans the period 1980-2016. It employs the ARDL approach to cointegration. Evidence from the study indicates that stock market development promotes economic growth in the short-run, but in the long-run, the growth impact of stock market development is not significant. The growth impact of market capitalization, value of shares traded, and market turnover ratio are all significant in the short run while that of trade openness is not. Meanwhile, trade openness is the only variable that significantly impacts economic growth in the long-run. The Bounds test for cointegration reveals a long-run relationship among the variables. All the variables, apart from trade openness, are positively correlated with economic growth. The results of this study imply that stock market development plays a major role in economic growth in Nigeria. It is recommended that the regulatory authority enacts policies that will promote liquidity, stability and accountability in the stock market which could possibly perpetuate economic growth in Nigeria.

Impact of Stock Market Development on Economic Growth: Evidence from Selected Sub-Saharan African Countries

This paper examines the impact of stock market development on economic growth in Sub‑Saharan Africa using a balanced panel data of five selected countries over the period 1993 – 2013 and the system generalised method of moments dynamic panel estimation framework. The paper finds a positive impact of stock market development proxied by the turnover ratio of domestic shares and market capitalization on economic growth though minimal. Furthermore, investment, lagged gross domestic product and human capital were found to have a significantly positive impact on growth while trade and foreign direct investment negatively impacted on growth, even though the results for foreign direct investment is not significant in all the models and consequently, not very robust. There should be policy measures aimed at enhancing economic growth using the development of the stocks market as a channel. Such policies should focus on developing the appropriate mix of taxation of investors as well as the development of requisite technology, institutional and regulatory framework that will facilitate an increase in the size and liquidity of the market in the sub‑region.

Impact of Stock Market Development on Economic Growth in BRICS

The study examines Stock Market development and economic growth in BRICS, Quarterly time series data for the period 1994QI to 2015Q4 were sourced from World Bank Indicator. The Panel Least Squares based on the fixed effect estimation was employed to determine how stock market development impacts on the economic growth of BRICS. Diagnostics tests were conducted to ascertain the robustness and stability of the regression results. The findings reveal that stock market development exerts significant impact on the economic growth. The study revealed that there is a positive correlation between stock market development indicators and BRICS’s economic growth. The study recommends that the weakness of each of the BRICS member country should be taken as policy focus and strategies necessary to strengthen them should be swiftly applied by the governments.

Analysis of Stock Market Development, Foreign Private Investment and Economic Growth in Nigeria

The study estimated the impact of stock market development and foreign private investment on economic growth in Nigeria over the period of 1985–2016, using secondary data from various publications of the Central Bank of Nigeria. The ordinary least square (OLS) technique was employed in this study, while the Engel and Granger co-integration approach was applied to determine the long-run relationship between the variables. The result showed that market capitalisation, all share index and real exchange rate have statistically significant impact on economic growth, while foreign direct investment, trade openness and gross national savings have insignificant impact on growth. The study also showed that there is a long-run relationship among stock market development, foreign private investment and economic growth in Nigeria. The error correction model (ECM) results showed that the model adjusts to equilibrium in the short run and that about 51 per cent of the disequilibrium between gross domestic product and the independent variables is corrected each year. The study recommended that policymakers and monetary authorities should gear efforts towards formulating policies that will fine-tune stock market performance and reduce issues, such as, unpaid dividends, delay in dividend payments and unhealthy transfer of stocks. This is pertinent to encourage greater population of the citizenry to invest in the stock market. Finally, the study concluded that provision and improvement of infrastructure and power as well as enforcement of investor-friendly policies by the government is needed as these will encourage the establishment of more firms and industries that will participate in the stock market, thereby contributing to the growth of the economy. JEL Classification: E22, F21, F43, O16

Determinants of economic growth in Hong Kong: The role of stock market development

We assessed the impact of stock market development on growth in Hong Kong for the period 1986Q2 to 2015Q4. By constructing a composite index of stock market development and controlling for the key determinants of growth, we found stock market development to promote growth both in the short and long run. We further constructed an alternative index of stock market development and found this conclusion to be robust. Our findings are broadly consistent with the growth experience of Hong Kong. Policies meant to promote stock market development may enhance growth in Hong Kong as well.