Author/Authors :
M، Bilal نويسنده Department ofAccounting, School of Management and Economics, Beijing Institute of Technology, Beijing, China , , Chen، Songsheng نويسنده Department ofAccounting, School of Management and Economics, Beijing Institute of Technology, Beijing, China , , Komal، Bushra نويسنده Department ofAccounting, School of Management and Economics, Beijing Institute of Technology, Beijing, China ,
Abstract :
Panel data models play an important role in consequence of stock market development on
economic growth in lower-middle income regions. Stock market development represented
through three indicators namely total stock value traded ratio (VTR), market capitalization
ratio (MCR) and turnover ratio (TR). The panel data of 20 lower-middle income countries
gathered from the period of 1990 to 2012. The study examines the impact of stock market
development on economic growth by panel data techniques by fixed effects and random effects
by applying Hausamn test. Overall results suggests that there is positive and significant
impact of stock market development on economic growth. The findings show a positive
relationship between stock market development and economic growth. This study also
measures the exact impact of stock market development on growth of economy by control
variables such as financial depth (FD), investment (INV), foreign direct investment (FDI),
trade openness (TO) and inflation (INF) but stock market development which is TR (ratio of
total value traded to the total value of listed shares) has insignificant relationship with
economic growth. This study is very beneficial for making effective decisions about financial
development, stock market development and economic development by prevailing stock
market conditions of countries.
