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Temporal causal relationship between stock market capitalization, trade openness and real GDP: evidence from Thailand

Komain Jiranyakul

MPRA Paper from University Library of Munich, Germany

Abstract: This study examines both short-run and long-run causal relationship between stock market capitalization, trade openness and economic growth in Thailand. Quarterly data over the period from the first quarter of 1993 to the fourth quarter of 2013 are used in the analysis. The results from this study show that there exists a unidirectional long-run causality running from stock market capitalization and trade openness to real GDP. In the short run, an increase in stock market capitalization causes economic growth while an increase in trade openness decreases it and vice versa. Furthermore, there exist short-run bidirectional negative causations between economic growth and trade openness. However, the short-run phenomena are temporary. Based upon the results from this study, policymakers should pay attention to measures that are able to enhance stock market capitalization and trade openness if the long-run target is to achieve high economic growth rate.

Keywords: Economic growth; market capitalization; trade openness; cointegration; causality (search for similar items in EconPapers)
JEL-codes: C22 F41 O11 (search for similar items in EconPapers)
Date: 2014-11
New Economics Papers: this item is included in nep-fdg, nep-gro and nep-sea
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https://mpra.ub.uni-muenchen.de/59652/1/MPRA_paper_59652.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/60340/1/MPRA_paper_60340.pdf revised version (application/pdf)

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