scholarly journals Does Stock Market Capitalization Influences Economic Growth in Africa? : Evidence from Panel Data

2015 ◽  
Vol 2 (1) ◽  
Author(s):  
Mohamed Jalloh
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Stock Market ◽  
Market Capitalization ◽  
Stock Market Capitalization

scholarly journals RELATIONSHIP BETWEEN THE STOCK MARKET DEVELOPMENT, BANKING SECTOR DEVELOPMENT AND ECONOMIC GROWTH IN THE CEE COUNTRIES

2021 ◽  
Vol 7 (3) ◽  
pp. 118-126
Author(s):  
Lidiya Yemelyanova
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Stock Markets ◽  
Banking Sector ◽  
Market Development ◽  
Stock Market Development ◽  
Market Capitalization ◽  
Banking Sector Development ◽  
The Impact ◽  
Stock Market Capitalization

The stock markets of most CEE countries have been actively developing and improving over the past decades but they still do not belong to the developed markets according to MSCI classification, the financial systems of these countries tends towards the bank-oriented type. Does the level of stock market development affect economic growth in CEE countries and do these countries need to develop their stock markets accordingly? The purpose of this article is to identify the direction of the causal link between stock market development, banking sector development and economic growth in Central and Eastern European (CEE) countries. The subject of the research is the relationship between the stock market development, banking sector development and economic growth in the CEE countries. Methodology. The research is based on the annual data for two time periods 1999-2012 and 1999-2015 for the 8 and 5 CEE countries, respectively. The study is based on the Granger causality test and linear regression models. According to results of the research the stock market development plays an important role in attracting foreign direct investment and economic growth in CEE countries in the long-run period. There are revealed the channels of indirect influence of the stock market capitalization on the economic growth. Stock market capitalization has impact on the banking sector and gross capital formation, which in turn have impact on the economic growth of CEE countries. There is the impact of both the stock market and the banking sector development on the economic growth in CEE countries during 1999-2015. However, the impact of the stock market size on the economic growth is positive and the impact of domestic credit to private sector is negative. Practical implications. The study proves the reasonable need for the CEE countries to move towards further development of the stock market, improving the market infrastructure and institutional environment in order to expand the size of the stock market and thereby contribute to the economic growth of this countries. Value/originality. The obtained conclusion about the role of the stock market in economic growth and attraction of FDI is of great importance both for Ukraine and other countries with similar trajectory of economic development in general and similar historical aspects of the origin of stock markets in particular and should be taken into account by state leaders when making decisions on the need to create conditions for development of such element of the country’s financial system as the stock market.

Stock Market Developmentand Economic Growth in Nigeria

2019 ◽  
Vol 9 (2) ◽  
pp. 232
Author(s):  
E. O. Ajayi ◽  
F. E. Araoye
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Market Development ◽  
Stock Market Development ◽  
Market Capitalization ◽  
Independent Variables ◽  
Turnover Ratio ◽  
The Government ◽  
Stock Market Capitalization

This paper empirically analyzed the effect of the Nigerian Stock market capitalization on the nation’s economic growth from 1985 to 2010. The economic growth was proxy by the GDP while the stock market variable considered included; market capitalization and market turnover ratio as independent variables as proxy for stock market development in terms of size and liquidity. The paper establishes a unidirectional causality that runs from economic growth to stock market. The result shows that economic growth influences stock market capitalization while stock market capitalization does not influence economic growth. The result indicates that economic growth catalyses stock market in Nigeria. The government is therefore advised to put up measures to stem up investors’ confidence and activities in the market so that it could contribute significantly to the Nigerian economic growth.

Is stock market sensitive to foreign capital inflows and economic growth?

2015 ◽  
Vol 8 (3) ◽  
pp. 142-164 ◽  
Author(s):  
Syed Ali Raza ◽  
Syed Tehseen Jawaid ◽  
Sahar Afshan ◽  
Mohd Zaini Abd Karim
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Foreign Capital ◽  
Capital Inflows ◽  
Series Data ◽  
Content Type ◽  
Market Capitalization ◽  
Long Run ◽  
Foreign Capital Inflows ◽  
Stock Market Capitalization

Purpose – The purpose of this study is to investigate the impact of foreign capital inflows and economic growth on stock market capitalization in Pakistan by using the annual time series data from the period of 1976 to 2011. Design/methodology/approach – The autoregressive distributed lag bound testing cointegration approach, the error correction model and the rolling window estimation procedures have been performed to analyze the long run, short run and behavior of coefficients, respectively. Findings – Results indicate that foreign direct investment (FDI), workers’ remittances and economic growth have significant positive relationship with the stock market capitalization in long run as well as in short run. Results of the dynamic ordinary least square and the fully modified ordinary least square suggest that the initial results of long-run coefficients are robust. Results of variance decomposition test show the bidirectional causal relationship of FDI and economic growth with stock market capitalization. However, unidirectional causal relationship is found in between workers’ remittances and stock market capitalization. Practical implications – It is suggested that in Pakistan, investors can make their investment decisions through keeping an eye on the direction of the considered foreign capital inflows and economic growth. Originality/value – This paper makes a unique contribution to the literature with reference to Pakistan, being a pioneering attempt to investigate the effects of foreign capital inflows and economic growth on stock market by using long time series data and applying more rigorous techniques.

scholarly journals FINANCIAL DEVELOPMENT DAN PERTUMBUHAN EKONOMI INDONESIA

2020 ◽  
Vol 5 (2) ◽  
pp. 140
Author(s):  
Yanuar Irzam ◽  
Ni Putu Wiwin Setyari
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Interest Rates ◽  
Financial Development ◽  
Labor Productivity ◽  
Trade Openness ◽  
Bank Credit ◽  
Real Interest Rates ◽  
Market Capitalization ◽  
Stock Market Capitalization

<p><em>This study aims to analyze the effect of financial development on Indonesia's economic growth using annual data for the 1985-2018 period. The ARDL-ECM model is used to determine the effect in the long term and short term. The results showed in the long run the variable stock market capitalization ratio, the ratio of bank credit to GDP, real interest rates, trade openness and labor productivity affect the economic growth of Indonesia. Variable stock market capitalization ratio significantly influences economic growth, while real interest rates, bank credit ratios to GDP and trade openness have no significant effect. In the short term, the stock market capitalization ratio, bank credit to GDP ratios, real interest rates, trade openness and labor productivity influences Indonesia's economic growth. Variable stock market capitalization ratio, Bank credit ratio to GDP, trade openness and labor productivity have a significant effect on economic growth, while real interest rates have no significant effect on Indonesia's economic growth, The implication of this research is that in order to overcome the impact of interest rates on other economic growth, the government, in this case Bank Indonesia as a regulator, needs to reduce the interest rate to a minimum to encourage the growth of the real sector and other economic variables. In addition, the government must encourage the development of a comprehensive economic system especially financial institutions and monetary policies that are not interest-based as a solution to overcome general economic problems</em></p><p> </p><p>Penelitian ini bertujuan untuk menganalis pengaruh financial development terhadap pertumbuhan ekonomi Indonesia dengan menggunakan data tahunan periode 1985-2018. Model ARDL-ECM digunakan untuk mengetahui pengaruh dalam jangka panjang dan jangka pendek. Hasil penelitian menunjukan dalam jangka panjang variabel rasio kapitalisasi pasar saham, rasio kredit Bank terhadap PDB, suku bunga riil, keterbukaan perdagangan dan produktivitas tenaga kerja berpengaruh terhadap pertumbuhan ekonomi Indonesia. Variabel rasio kapitalisasi pasar saham secara signifikan berpengaruh terhadap pertumbuhan ekonomi, sedangkan suku bunga riil, rasio kredit Bank terhadap PDB dan keterbukaan perdagangan tidak berpengaruh signifikan.Dalam jangka pendek variabel rasio kapitalisasi pasar saham, rasio kredit Bank terhadap PDB, suku bunga riil, keterbukaan perdagangan dan produktivitas tenaga kerja berpengaruh terhadap pertumbuhan ekonomi Indonesia. Variabel rasio kapitalisasi pasar saham, rasio kredit Bank terhadap PDB, keterbukaan perdagangan dan produktivitas tenaga kerja berpengaruh signifikan terhadap pertumbuhan ekonomi. Sedangkan suku bunga riil tidak berpengaruh signifikan terhadap pertumbuhan ekonomi Indonesia, Untuk itu, dalam mengatasi dampak suku bunga terhadap pertumbuhan ekonomi lainnya maka pemerintah dalam hal ini Bank Indonesia sebagai regulator perlu menurunkan tingkat suku bunga sampai batas minimal untuk mendorong pertumbuhan sektor riil serta variabel ekonomi lainnya. Selain itu, pemerintah harus mendorong pengembangan sistem ekonomi secara komprehensif khususnya lembaga keuangan dan kebijakan moneter yang tidak berbasis bunga sebagai solusi untuk mengatasi permasalahan ekonomi secara umum</p>

scholarly journals The Effects of Information Communication Technology on Stock Market Capitalization: A Panel Data Analysis

2017 ◽  
Vol 7 (1) ◽  
pp. 261 ◽  
Author(s):  
Sang Lee ◽  
Matthew Alford ◽  
John Cresson ◽  
Lara Gardner
Keyword(s):  
Stock Market ◽  
Fixed Effects ◽  
Panel Data Analysis ◽  
Communication Technologies ◽  
Information Communication Technologies ◽  
Fixed Effects Model ◽  
Information Communication ◽  
Market Capitalization ◽  
Using Data ◽  
Stock Market Capitalization

The level of investment in information communication technologies (ICT) that may affect stock market capitalization varies substantially across countries. Using data on 81 countries from 1998 to 2014, we use a country-fixed effects model to estimate the relationship between ICTs and stock market capitalization. Our empirical model is built on the premise that (1) increased deployment of ICT allows financial market participants to make more informed decisions at reduced inherent risks associated with deficient information or uncertainty in financial markets; and (2) increased access to and use of information communication technologies is expected to improve a country's economic fundamentals. The empirical results support our hypothesis that ICT expansions are positively associated with stock market capitalization.

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