Stock Market Deregulation, Macroeconomic Variables and Stock Market Performances

Auzairy, Noor Azryani; Ahmad, Rubi; Ho, Catherine S. F.

doi:10.7763/ijtef.2011.v2.155

Cited by 9 publications

(8 citation statements)

References 20 publications

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“…Financial liberalization index was used following the study by Auzairy et al (2011). They defined stock market liberalization as the event when there is a percentage change in foreign ownership of local companies hence, we adopted their approach.…”

Section: Definition and Measurement Of Variablesmentioning

confidence: 99%

Market opening and economic growth in Nigeria

Ifeanyi¹,

Romanus²,

Tunji³

2020

J. Econ. Int. Finance

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Market opening positively impacts economic growth due to reduction in the cost of capital and international risk diversification, amongst others in Nigeria. Using a robust set of econometric approach involving unit root test, co-integration, vector error correction model and granger causality, there is evidence that current value of economic growth responds to disequilibrium from past values of real gross domestic product, stock market development, foreign direct investment, trade openness, inflation and banking sector development in the long run. The result also shows that past values of real gross domestic product, foreign direct investment and trade openness promotes economic growth in the short run. The study, therefore, concludes that there are bi-directional causalities both in the short term and the long term between the dependent and explanatory variables. Based on the findings, the study recommends that policy makers in Nigeria should pay more attention to factors that can boost stock market development, foreign direct investment, trade openness, inflation and banking sector development in order to impact economic growth more positively in line with theoretical evidence that market opening positively impacts economic growth especially in frontier and emerging markets such as Nigeria.

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Section: Definition and Measurement Of Variablesmentioning

confidence: 99%

Market opening and economic growth in Nigeria

Ifeanyi¹,

Romanus²,

Tunji³

2020

J. Econ. Int. Finance

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“…Following Auzairy et al (2011), we incorporate three control variables which are exchange rate, interest rate and oil price in the model of cost of capital.…”

Section: Theoretical Background and Literature Reviewmentioning

confidence: 99%

“…Following the study held by Auzairy et al (2011), the control variables of interest rate, foreign exchange rate and spot crude oil price are being incorporated into the model. Table I provides the list of variables with definitions, references and sources.…”

Section: Sample Variables and Model Specificationmentioning

confidence: 99%

Stock market liberalization: implications on cost of capital in emerging Islamic countries

Ilhan

2019

JCMS

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Purpose Most of the major Islamic countries’ stock exchanges have not been able to perform at the same pace with the major emerging countries’ stock exchanges since the mid of 1990s. The purpose of this paper is to examine the implications of stock market liberalization on cost of capital as one of the crucial driver to stock market development and physical investment growth in emerging Islamic countries. Design/methodology/approach This study employs static panel data techniques on the sample of seven emerging Islamic countries over the years 1989-2008. Findings The findings of this study suggest that stock market liberalization significantly reduces cost of capital in the stock markets of sample Islamic countries, which carries policy-oriented implications. Reduction in the cost of capital increases the number of exchange-traded companies, profitability of projects and aggregate investment level; therefore, the study findings are highly concerned by the economic policymakers, corporations and investors alike. Research limitations/implications In the literature, different proxies are employed to measure stock market liberalization and cost of capital as well. Due to data limitations, this study could not employ different proxies for both, especially for stock market liberalization, for robustness purpose. That limitation further restricted the coverage of Islamic stock markets and time period. Therefore, generalization of the study results for overall Islamic stock markets can be slightly drawn. Originality/value The paper provides further understanding regarding the effects of SML on cost of capital, thereby indirectly on the stock market development, in the context of EIC.

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“…In relation to the stock markets of ASEAN countries, recent research conducted by Auzairy et al (2011) entitled "Stock Market Deregulation, Variables Macroeconomic and Stock Market Performances" is important. The purpose of this paper is to explore the effects of deregulation of the stock market on the stock market of the ASEAN-3; Malaysia, Thailand and Indonesia.…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Macro Economy on Stock Price Index: An Empirical Study of Five ASEAN Countries

Prowanta

Moeljadi

Sumiati

et al. 2017

Global J. Bus. Soc. Sci. Review

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Objective - The objective of the study is to empirically investigate the relationship between macroeconomic variables as Gross Domestic Product (GDP), inflation, interest rates, exchange rates, foreign exchange reserves, current accounts and export-import towards the stock price index. Methodology/Technique - The data used is monthly data for macroeconomic and the stock price index of five ASEAN countries including Indonesia, Malaysia, Singapore, Thailand and the Philippines from 2006 to 2015. The analysis uses a regression estimation of panel data and a series of chow tests i.e. the Hausman test and the LM test as the selection process, with the aim of determining the macroeconomic variables that could significantly affect the stock price index of five ASEAN countries. Findings - The result show that of the seven macroeconomic variables affecting the stock price index, only four macroeconomic variables showed a significant effect. These are GDP, interest rates, exchange rates, and inflation. Meanwhile, three other variables (foreign exchange reserves, current accounts and export-import) did not show a significant effect. Novelty - The study looked at the effect of deregulation on stock markets, focusing on variables that significantly influence the stock price index. Type of Paper - Empirical Keywords: Stock Price Index; Macro Economics; Five ASEAN Countries.

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Stock Market Deregulation, Macroeconomic Variables and Stock Market Performances

Cited by 9 publications

References 20 publications

Market opening and economic growth in Nigeria

Market opening and economic growth in Nigeria

Stock market liberalization: implications on cost of capital in emerging Islamic countries

The Impact of Macro Economy on Stock Price Index: An Empirical Study of Five ASEAN Countries

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