Equity market and money supply spillovers and economic growth in BRICS economies: A global vector autoregressive approach

Nahla Samargandi, Ali Kutan, Kazi Sohag () and Faisal Alqahtani

The North American Journal of Economics and Finance, 2020, vol. 51, issue C

Abstract: Previous studies report that private credit as a proxy of financial development contributes to economic growth in BRICS economies. This paper employs three additional measures of financial development, namely equity market, money supply and market capitalization, and further investigates cross-country evidence on the impact of equity market and money supply spillovers on economic growth in BRICS economies. Utilizing a Global VectorAutoregressive (GVAR) framework and quarterly data from 1989Q1 and to 2012Q4 from BRICS economies, we find that equity market and money supply variables do not predict the contributions of financial development in each BRICS member in boosting economic growth in the other member countries. However, market capitalization significantly influences economic growth. These results suggest that, besides private credit, market capitalization is another key channel of promoting growth in individual economies and the region. Policy implications of the findings are discussed.

Keywords: Equity market; Money supply; Economic growth; Global Vector Autoregressive framework; BRICS (search for similar items in EconPapers)
JEL-codes: C23 E17 F36 O11 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:51:y:2020:i:c:s1062940818303255

DOI: 10.1016/j.najef.2019.101060

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