Impact of Gdp, Foreign Direct Investment, Inflation Rate, and Interst Rate on Stock Market Values in Saudi Arabia

Abstract

This study aims to find the long run and short run equilibrium relationships between stock market values (MV) and macroeconomic variables (GDP, foreign direct investment (FDI), inflation rate (INF), and interest rate (IR)) using annual time series data for the 1993-2018 period. The results indicate that all macroeconomic variables are stationary in the first difference and co-integrated with MV. The results also indicate that there is a long run relationship between MV and all macroeconomic variables and between GDP and all other variables. But there is one short run relationship between stock market values and all variables in lagged. The results of this study suggest that Saudi Arabian policy makers should pay attention to the effects of monetary policies and economic activity measurement on the stock market index.

Exploring Macroeconomic indicators Influence on Capital Market Performance - A Cross-BRICS Analysis.

“…The findings reveal a positive correlation between the NSE's performance and GDP, inflation, gold prices, and exchange rates, while unemployment does not exhibit a significant impact on the NSE. (Algarini, 2020)The goal of this study is to determine equilibrium correlations, both short-and long-term, involving stock market values and important macroeconomic factors, such as GDP, interest rates, foreign direct investment, and inflation. Based on annual time series data from 1993 to 2018, the research shows that all macroeconomic variables show co-integration with stock market values and display stationarity in the first difference.…”

Impact of GDP and Inflation on Stock Market Performance in Nepal and Sri Lanka: A Comparative study of NEPSE and CSE index

“…The selection criteria of literature review in this research are the research articles conducted in the field of GDP, inflation, interest rate, and exchange rate of stock prices which are available in Google Scholar. The research articles of , Algarini (2020), , Karki (2017), Kotha & Sahu (2016), , Usman & Adejarae (2013), were focused on meeting our review criteria. explored the effects of macroeconomic factors on Sri Lanka's stock market performance.…”

“…The consequences of the above mentioned findings for stock market experts, investors, and policymakers are practical. Algarini (2020) examined the relationship between macroeconomic factors (eg., GDP, FDI, inflation rate, and interest rates and the two-point stock exchange principles of Saudi Arabia's). The analysis reveals no short-run association between the fundamentals of the stock market and the above-mentioned factors, but a long-run relationship between macroeconomic indicators and market values, particularly between GDP and other variables.…”

Factors Affect Tourism Stock Price in Indonesia

“…Given interest rate, exchange rate, and inflation, the tourism stock price and many researchers have given different results in their studies. [17] reveals that gross domestic product, foreign direct investment, inflation, and interest rate are co-integrated with market value; the inflation rate and interest rate positively and significantly impact the stock market. [18] and [19] have also concluded that interest rates positively impact stock prices.…”

“…[15] and [16] show that inflation significantly negatively affects the stock price. [17] study indicates that inflation and interest rates positively and significantly impact the stock market. [12], [18], [19] results show that the interest rate positively impacts the stock price.…”