Analysis of the Impact of Economic Growth and Asymmetric Information of Capital Market on Investors' Confidence

Seyed Abdollah Moosavi (), Homayoun Ranjbar (), Majid Sameti () and Hossein Sharifi-Renani ()
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Seyed Abdollah Moosavi : Isfahan (Khorasgan) Branch, Islamic Azad University
Homayoun Ranjbar : Isfahan (Khorasgan) Branch, Islamic Azad University
Majid Sameti : Isfahan University
Hossein Sharifi-Renani : Isfahan (Khorasgan) Branch, Islamic Azad University

Journal of Money and Economy, 2019, vol. 14, issue 1, 41-62

Abstract: The stock exchange, as a part of the capital market, in case of necessary conditions, can mobilize national capital and direct it towards economic growth. A secure environment where managers are working towards stockholders for investment and information asymmetry is considered to be the features of a good business. This research seeks to investigate whether information asymmetry of the financial market and macroeconomic growth can affect investors’ confidence ration. Our model is estimated using MGARCH for seasonal data of the stock market in Iran and the real GDP during the period from 1991-2016. The findings of the research have shown a significant effect of macroeconomic growth and information asymmetry of the financial market on the investors’ confidence. There is also a two-way gradient relationship between the information asymmetry and the confidence of investors in the short run. There is a cointegration relationship between these three variables.

Keywords: Information Asymmetry; Investors’ Confidence; Total Stock Price Index; Economic Growth; Multivariate GARCH (search for similar items in EconPapers)
JEL-codes: D81 E44 G11 (search for similar items in EconPapers)
Date: 2019
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