Stock Market Performance and Economic Growth Nexus: A Panacea or Pain to Ghana?

George Asumadu and Emmanuel Amo-Bediako
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George Asumadu: Department of Accountancy and Accounting Information Systems, Kumasi Technical University, Ghana
Emmanuel Amo-Bediako: Department of Mathematics and Statistics, Kumasi Technical University, Ghana

International Journal of Research and Innovation in Social Science, 2021, vol. 5, issue 4, 423-429

Abstract: This study examined whether stock market performance instigates growth, using yearly data from the World Development Indicators and the Ghana Stock Exchange for the period 1990 to 2018. The Johassen co-integration and vector error correction model framework were applied to determine the long-run and short-run dynamics. The Granger causality test was used to estimate the link between the stock market and economic growth. The findings showed a statistically significant and negative long-run relationship between the stock market and the economic growth nexus. The Granger causality test results showed that there was no causality between stock market performance and economic growth. Hence, the study concluded that stock market performance does not promote growth in Ghana. The research provides pragmatic guidance to policymakers to focus their efforts on the information flow of exchange activities to the public space and start a nationwide informative tour to explain the roles and gains of investing in the exchange. Policymakers should also ensure that the exchange efficiency rate is activated by listing more firms.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:bcp:journl:v:5:y:2021:i:4:p:423-429

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