Stock market and economic growth in selected Asian countries

Hong Peng Tang, Muzafar Shah Habibullah and Chin-Hong Puah

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates the relationship between stock markets and economic growth in twelve Asian countries from 1980 to 2004. In this study, we utilize the Johansen cointegration and Granger causality tests using quarterly data. Results from cointegration test suggest that there is long run relationship between stock markets and economic growth in four countries namely, China, the Philippines, Singapore and Taiwan. The results of Granger causality test indicate that there is a bi-directional feedback relationship between stock markets and economic growth in China, Hong Kong, Indonesia, Malaysia and Thailand. Whereas in Japan and Korea, we found that there exists a unidirectional short run causal effect running from stock markets to economic growth. On the contrary, we found short run causal effect running from economic growth to stock markets in the case of India and Singapore. In addition, there is no evidence of causality among the variables under study in Sri Lanka.

Keywords: Stock markets; Economic growth; Asian economies (search for similar items in EconPapers)
JEL-codes: G10 O10 O53 (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in Journal of Economics, Finance and Administrative Sciences 7 (2007): pp. 43-52

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