Stock Markets, Banks and Long Run Economic Growth: A Panel Cointegration-Based Analysis

Cavenaile, Laurent; Gengenbach, Christian; Palm, Franz C.

doi:10.1007/s10645-013-9220-6

Cited by 22 publications

(24 citation statements)

References 68 publications

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“…In case you are also interested in literature on economic activity and overall financial development, a well-arranged summary can be found e.g. in Demirgüc-Kunt and Levine (1996), Levine (1997), Cavenaile et al (2014) or Havranek et al (2014).…”

Section: Literature Reviewmentioning

confidence: 99%

“…There is a prevailing amount of papers concluding that stock markets have impact on economic activity, e. g. Atje and Jovanovic (1993), Mauro (2003), Beck and Levine (2004), Nieuwerburgh et al (2006), Nowbutsing and Odit (2009), Panopoulou (2009), Nayaran and Nayaran (2013, Tang (2013), Cavenaile et al (2014), Prahdan et al (2014), Gazdar and Cherif (2015), Georgantopoulos et al (2015) or Prahdan et al (2015). Levine and Zevros (1998) find some variables not significant, but stock market liquidity is positively associated with contemporaneous and future growth rates.…”

Section: Literature Reviewmentioning

confidence: 99%

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A Note on Relationship between Economic Activity and Stock Market Development: a Case of Euro Area Countries

Kajurová

2017

Acta Univ. Agric. Silvic. Mendelianae Brun.

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The aim of the paper is to empirically examine if the causal relationship between economic activity and stock market development exists in the selected 11 EA countries. The existence of relationship is investigated with the use of cointegration, vector error correction model and Granger causality during three sub-periods between January 1993 and January 2017. The results show that the general conclusion on the relation between activity and stock market development cannot be stated and that country-specific development should be taken into account when making decisions either from the investors' or policy makers' perspective. It also seems that the level of integration plays important role when studying the nature of relationship between variables during different time periods.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

A Note on Relationship between Economic Activity and Stock Market Development: a Case of Euro Area Countries

Kajurová

2017

Acta Univ. Agric. Silvic. Mendelianae Brun.

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“…They found single cointegrating vector between financial development and growth. There was also a causality going from financial development to economic growth [10]. Rad & Etemadmoghaddamb examine the long-and short-run effects of stock market development and banking sector development on economic growth in Iran through the period 1995 to 2010 by using (ARDL) to test long-run relationship & (ECM) to test shortrun relationship.…”

Section: Literature Reviewmentioning

confidence: 99%

Stock Market Development and Economic Growth: Evidences from Egypt

Badr¹

2015

IJTEF

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Abstract-This study investigates the causal relationship between stock market development and economic growth in Egypt. To achieve this objective, unit root tests were conducted for time series data for the period of 2002 to 2013 in their levels and their first differences according to Dickey-Fuller. Johansen co-integration analysis was conducted to examine whether the variables are co-integrated of the same order. Vector autoregression estimates (VAR) was chosen to test the long-run relationship between stock market development and economic growth. VAR Granger Causality test was applied to determine the direction of causality between the examined variables. Finally, Variance Decomposition and Impulse response function (IRF) were used for forecasting the future relationship between the study variables. The results do not indicate a causal relationship between stock market development alone and the economic growth. However, the results show a link between stock market development as well as foreign direct investment and economic growth. Therefore, it can be inferred that government should reshape and adjust the stock market and take care of FDI to support economic growth.

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“…They found evidence of positive causal relationship between stock market development and economic growth. Cavenaile, Gengenbach& Palm (2014) investigate the long run relationship between the development of banks and stock markets and economic growth and causality direction in five countries through the period 1977 to 2007 by using Unit Root Test, Cointegration Test and Causality Test. They found single cointegrating vector between financial development and growth.…”

Section: Literature Reviewmentioning

confidence: 99%

Can Stock Market Development boost Economic Growth in Developing Economies? The Case of Egypt

Badr¹

2015

JEDS

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This study investigates the causal relationship between stock market development and economic growth in Egypt. To achieve this objective, unit root tests were conducted for time series data for the period of 2002 to 2013 in their levels and their first differences according to Dickey-Fuller test, Johansen co-integration analysis was conducted to examine whether the variables are co-integrated of the same order. Vector Auto regression Estimates (VAR) was chosen to test the long-run relationship between stock market development and economic growth. VAR Granger Causality test was applied to determine the direction of causality between the examined variables. Finally, Variance Decomposition (VD) and Impulse Response Function (IRF) were used for forecasting the future relationship between the study variables. The results do not indicate a causal relationship between stock market development alone and the economic growth. However, the results show a link between stock market development as well as foreign direct investment and economic growth. Therefore, it can be inferred that government should reshape and adjust the stock market and take care of FDI to support economic growth.

show abstract

Stock Markets, Banks and Long Run Economic Growth: A Panel Cointegration-Based Analysis

Cited by 22 publications

References 68 publications

A Note on Relationship between Economic Activity and Stock Market Development: a Case of Euro Area Countries

A Note on Relationship between Economic Activity and Stock Market Development: a Case of Euro Area Countries

Stock Market Development and Economic Growth: Evidences from Egypt

Can Stock Market Development boost Economic Growth in Developing Economies? The Case of Egypt

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