Do Financial Market Openness and Stock Market Returns Drive Economic Growth in GCC Countries? New Investigation from Panel Structural Breaks

Hichem Saidi, Houssem Rachdi, Abdelaziz Hakimi and Khalil Alnabulsi ()
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Hichem Saidi: Department of Economics, College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh 13318, Saudi Arabia
Houssem Rachdi: Institut des Hautes Études Commerciales de Carthage Carthage Business School, Tunis 1002, Tunisia
Abdelaziz Hakimi: Faculty of Law, Economics, and Management of Jendouba, Jendouba 8100, Tunisia
Khalil Alnabulsi: Academy Media, Commerce & Entrepreneurship, NHL Stenden University of Applied Sciences, 8917 DD Leeuwarden, The Netherlands

IJFS, 2025, vol. 13, issue 1, 1-18

Abstract: This paper revisits the effects of financial market openness and stock market returns on economic development in the Gulf Cooperation Council countries over the period 1993–2022. We performed the panel stationarity test advanced that accommodates the presence of multiple structural breaks and exploits the cross-section variations. Empirical results from several panel tests provide strong support for the long-run positive effect of financial market openness on economic growth and a long-run negative association between stock market returns and growth. Findings of the robustness checks reveal that the effect of both financial market openness and stock market returns on economic growth differs across countries.

Keywords: financial market openness; stock market returns; economic development; structural breaks; GCC countries; E44; G21; G28; F36 (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
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