The Role of Capital Markets to the Economic Growth of Emerging Economies
Author | : Archil Makaridze |
Publisher | : |
Total Pages | : 0 |
Release | : 2021 |
Genre | : Capital market |
ISBN | : |
Download The Role of Capital Markets to the Economic Growth of Emerging Economies Book in PDF, ePub and Kindle
The impact of capital market development on economic growth is a subject of a controversial discussion in the financial literature. Many economists argue that well-functioning capital markets are promoting long-run economic growth. In contrast, some economists suggest that the high volatility and the existence of asymmetric information in the capital markets, especially in emerging economies may have a negative impact on economic growth. Using three different statistical data analysis techniques: panel data regression, correlation matrix and Granger causality test on 21 emerging markets for the period 2000-2018, the relationship was tested between capital market development and economic growth. The empirical findings of this study suggest that the capital market development has a positive impact on economic growth in emerging economies, if the overall macroeconomic conditions are stable. The stock market capitalization Granger caused the economic growth. However, the results also suggest some stock market proxies, such as stock market liquidity is correlated negatively with real GDP growth rate.