MACROECONOMIC DETERMINANTS OF STOCK MARKET DEVELOPMENT: EVIDENCE FROM BORSA ISTANBUL

Yılmaz Bayar
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Yılmaz Bayar: Usak University, Department of Economics

Studii Financiare (Financial Studies), 2016, vol. 20, issue 1, 69-89

Abstract: Stock markets have experienced significant improvements especially during the past 30 years, fostered economic growth and become one of the important leading indicators for the economies. Economic growth, saving rate, banking sector development, trade openness, foreign direct investments, institutional quality and stock market liquidity are found to be major determinants behind stock market development in the literature. This study investigates major macroeconomic determinants of stock market development in Turkey during the period 2005:Q1-2015:Q3 using ARDL cointegration, Toda and Yamamoto (1995) causality test and regression analysis. We also found that both economic growth and stock market liquidity had positive impact on stock market development in the long run, while inflation had negative impact on stock market development in the long run.

Keywords: Macroeconomic Variables; Banking Sector; Stock Market; Time Series Analysis; Turkey (search for similar items in EconPapers)
JEL-codes: C22 G15 G21 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (16)

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