Does stock market performance have a long effect on economic growth: Evidence from MENA

Journal of Governance and Regulation

article

Wasfi Al Salamat¹  Khaled I. Batayneh² 

[1] Department of Banking and Financial Sciences, Faculty of Economics and Administrative Sciences, the Hashemite University;Department of Economics, Faculty of Economics and Administrative Sciences, the Hashemite University

关键词: Financial Markets;    Economic Growth;    Panel Data;    ARDL;    MENA;   

DOI  :  10.22495/jgrv11i2siart16

学科分类：社会科学、人文和艺术（综合）

来源: Virtus Interpress

【 摘 要 】

Financial market has a close relationship with economic growth because increasing economic growth, representing the real gross domestic product (GDP), will enhance the efficiency and develop the stock market. On the other hand, the good performance of the stock market will affect economic growth positively. This paper aims to investigate the impact of stock market performance on the economic growth of a group of MENA countries during the time period 2000–2019. This study uses unbalanced panel data, unit root test, co-integration test, and autoregressive distributed lag (ARDL) model for data analysis (Kao, 1999; Pesaran, Shin, & Smith, 2001). The findings report that the stock market index, banking sector development, the ratio of foreign direct investment (FDI) to the GDP, and the consumer price index, as a proxy of inflation, have a significant positive long-run effect on the economic growth, while the ratio of broad money supply (M2) to the GDP has a significant negative long-run effect on the economic growth. The policymakers and government can based on the results of the study in developing and adopting policies to improve and enhance the efficiency of the stock market and attracting new investors inside and outside the country, which results in increasing the economic growth.

【 授权许可】

CC BY-NC