Macroeconomic Determinants of Stock Market Development: Evidence from Panel Data Analysis

Faycal Chiad and Hamoudi Hadj Sahraoui

MPRA Paper from University Library of Munich, Germany

Abstract: Arab stock exchanges have witnessed tremendous growth in recent decades, and the number of listed companies and the size of stock market capitalization have increased. In the light of this remarkable growth, this study aims to find out what are the most important determinants and economic factors affecting this development during the period 2006– 2017. By employing panel data models, we find that trade openness; market liquidity, money supply and economic growth have positive impacts on stock market development, whereas the global financial crisis has negative impact. Based on these results, measures should be taken to improve market liquidity, control of money supply, and maintain a balanced economic growth rate to promote the development of Arab stock exchanges. Policy recommendations are provided based on these findings.

Keywords: Macroeconomic variables; stock markets development; Arab countries; panel data analysis. (search for similar items in EconPapers)
JEL-codes: C22 C23 E44 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ara
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