scholarly journals The Effect of Macroeconomic Factors on the Stock Market Development in Asia-Pacific Countries

2021 ◽  
Vol 5 (1) ◽  
pp. 195-218
Author(s):  
Gökhan ÖZKUL ◽  
Muhammed KASIM
Keyword(s):  
Stock Market ◽  
Asia Pacific ◽  
Market Development ◽  
Macroeconomic Factors ◽  
Stock Market Development

scholarly journals Firm-specific and Macroeconomic Determinants of Capital Structure: Evidence from Pharmaceutical Industry in Bangladesh

2018 ◽  
pp. 43-57
Author(s):  
K.M. Zahidul Islam ◽  
Meskat Ibne Sharif ◽  
Md. Nurul Hoque
Keyword(s):  
Stock Market ◽  
Capital Structure ◽  
Interest Rates ◽  
Practical Implication ◽  
Market Development ◽  
Gdp Growth ◽  
Significant Positive Association ◽  
Macroeconomic Factors ◽  
Stock Market Development ◽  
Pharmaceutical Firms

Purpose: This study explores the significance of firm-specific and macroeconomic factors to explain variation in leverage using a sample of twenty listed pharmaceutical firms in Dhaka Stock Exchange over a six year period of 2008-2012. Design: In this study, panel data has been used and both firm specific and macroeconomic factors are analyzed as the determinants of leverage for pharmaceuticals firms in Bangladesh. Findings: This study employs leverage measure (book leverage) as dependent variable and ten factors (liquidity, profitability, tangibility, debt coverage, growth rate, firm size, GDP growth, and inflation, interest rate, and stock market development) as determinants of capital structure. Around 51% variation in leverage is explained by selected macroeconomic and firm specific factors, while the remainder is explained by unobserved macroeconomic and firm specific differences. Practical Implication: Estimated results show that GDP growth has significant positive association with the leverage. However, liquidity, profitability, tangibility, sales growth, inflation, interest rates, and stock market development reveal inverse relation with leverage. Finally the results suggest that that both trade-off and pecking order theories can explain financing decisions of listed pharmaceutical firms in Bangladesh.

Determinants of stock market development: a review of the literature

2017 ◽  
Vol 34 (1) ◽  
pp. 143-164 ◽  
Author(s):  
Sin-Yu Ho ◽  
Bernard Njindan Iyke
Keyword(s):  
Stock Market ◽  
Real Income ◽  
Institutional Factors ◽  
Market Development ◽  
Empirical Literature ◽  
Large Set ◽  
Review Of The Literature ◽  
Macroeconomic Factors ◽  
Content Type ◽  
Stock Market Development

Purpose This paper aims to provide a comprehensive review of the literature on the determinants of stock market development. Design/methodology/approach The paper divides the existing studies into the theoretical and empirical literature. Then, it analyses these studies in turn. Findings Based on the theoretical literature, the determinants of stock market development can be broadly classified into two groups: macroeconomic factors and institutional factors. The theory and the empirics predict different ways in which macroeconomic factors affect stock market development. The real income and its growth rate foster stock market development, while the banking sector, interest rate and private capital flows can foster or inhibit it. Inflation and exchange rates have adverse effects on stock market development. In terms of the institutional factors, the literature indicates that different legal origins and stock market integration can have a positive or negative impact on stock market development. In addition, factors such as legal protection of investors, corporate governance, financial liberalisation and trade openness contribute positively to the development of the stock market. Research limitations/implications From the survey, it is imperative that policies which aim at enhancing institutional quality, financial integration, real income growth, macroeconomic stability and capital inflows, among others, will certainly promote stock market development within and across countries. Although the empirical studies have incorporated a large set of variables in their models, the theoretical studies do not contain rich models of stock market development. It is understandable that a theoretical model which contains a large set of the determinants of stock market development may be difficult to solve. However, such a model seems very appealing and will provide a unification of the existing literature. Originality/value The originality of the paper lies in the fact that it is the first to undertake a survey of the determinants of stock market development in the literature. It is hoped that this paper will spur further theoretical and empirical research on the determinants of stock market development.

Formation of optimal capital structure of domestic corporations in times of crisis: Econometric analysis of determinants

2020 ◽  
Vol 19 (2) ◽  
pp. 374-398
Author(s):  
V.V. Metel'skaya
Keyword(s):  
Regression Analysis ◽  
Financial Crisis ◽  
Stock Market ◽  
Capital Structure ◽  
Market Development ◽  
Macroeconomic Factors ◽  
Stock Market Development ◽  
Optimal Capital Structure ◽  
Correlation And Regression Analysis ◽  
Optimal Capital

Subject. The article addresses building the optimal capital structure in the face of financial globalization, taking into account the ever-changing factors of external economic and geopolitical environment, including the financial crisis. Objectives. The purpose is to perform empirical tests of hypotheses about the nature of corporate financial leverage dependence on traditional determinants during and after the financial crisis in Russia's emerging market. I used a large data set on 49 public companies in seven leading sectors of the Russian economy from 2011 to 2017. Methods. The study employs the correlation and regression analysis. Results. The results of correlation and regression analysis show that the application of traditional theories of capital structure in the current conditions of financial globalization in a developing country is ineffective for forming an optimal capital structure; macroeconomic factors have a significant impact on the formation of corporate capital structures, which is particularly reflected during and after the crisis; the financial crisis has a considerable impact on the capital structure of companies; the determinant of stock market development has a real impact on leverage and plays an important role in financial decision-making after the financial crisis. Conclusions. I revealed inverse relationship between the leverage and variable size of companies after financial crisis, which contradicts to the trade-off theory and corresponds to the pecking order theory. This supports the hypothesis that macroeconomic factors are crucial, but the variable of stock market development has increased essentially as compared to the pre-crisis period.

Interest Rate, Foreign Exchange Rate, and Stock Market Development in Nigeria

2018 ◽  
Vol 9 (3) ◽  
pp. 247-253 ◽  
Author(s):  
Edward Adedoyin Adebowale ◽  
Akindele Iyiola Akosile
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Stock Market ◽  
Foreign Exchange ◽  
The United States ◽  
Ordinary Least Squares ◽  
Foreign Exchange Rate ◽  
Market Development ◽  
National Bureau ◽  
Stock Market Development

This research investigated the effect of interest rate and foreign exchange rate on stock market development in Nigeria. This research was centered on two research problems. First, it was whether interest rate had a significant effect on stock market development in Nigeria. Second, it was whether foreign exchange rate had a significant impact on stock market development in Nigeria. The scope of the research covered the period from 1981 to 2017. Data for this period were chosen because it covered pre and post-liberalization periods of Nigerian financial system. This research made use of ex post facto research design. Secondary data were sourced from Nigerian Stock Exchange reports, Central Bank of Nigeria statistical bulletins, and National Bureau of Statistics publications. Data were collected on Stock Market Capitalization (SMC), Prime Lending Rate (PLR) and Real Exchange Rate (RER) (Nigerian Naira in relation to American Dollars of the United States). Data analysis was carried out with Ordinary Least Squares (OLS) and Cochrane-Orcutt Iterative techniques. The findings reveal that interest rate has a significant negative effect, and foreign exchange rate has a significant positive effect on Nigerian stock market development during the period covered. It is suggested that monetary authorities should strive to formulate policies that will make interest and foreign exchange rates stable, competitive, and at a level that will stimulate the investment of funds in the stock market.

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