Stock Market Development and Economic Growth: The Case of MSCI Emerging Market Index Countries

Veli Akel () and Talip Torun ()
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Veli Akel: Erciyes University
Talip Torun: Erciyes University

A chapter in Global Financial Crisis and Its Ramifications on Capital Markets, 2017, pp 323-336 from Springer

Abstract: Abstract Aim of this study is to empirically investigate the role of stock market development on economic growth of the emerging markets listed in MSCI Emerging Market Index using annual data over the period from 1995 to 2012. We employ Panel Data Analysis to examine this relationship. The MSCI Emerging Market Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Market Index consists of the following 19 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Morocco, Mexico, Peru, Philippines, Poland, Russia, South Africa, Korea, Thailand, and Turkey. Among the stock market development indicators used in the study, stock market capitalization ratio is used as a proxy for market size while value traded ratio and turnover ratio are used as proxies for market liquidity. The individual indicators of stock market development reveal that the market capitalization and turnover ratios robustly and positively influence the level of economic growth.

Keywords: Economic Growth; Gross Domestic Product; Stock Market; Panel Data; Market Capitalization (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-319-47021-4_23

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DOI: 10.1007/978-3-319-47021-4_23

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