Macroeconomic Determinants of Stock Market Development

Valeriano F. García and Lin Liu
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Valeriano F. García: World Bank, http://www.worldbank.org/
Lin Liu: University of Kentucky

Journal of Applied Economics, 1999, vol. II, pages 29-59

Abstract: Using pooled data from fifteen industrial and developing countries from 1980 to 1995, this paper examines the macroeconomic determinants of stock market development, particularly market capitalization. The paper finds that: (1) real income, saving rate, financial intermediary development, and stock market liquidity are important determinants of stock market capitalization; (2) macroeconomic volatility does not prove significant; and (3) stock market development and financial intermediary development are complements instead of substitutes.

Date: 1999
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