IDEAS home Printed from https://ideas.repec.org/a/src/jafeec/v6y2020i4p1189-1197.html
   My bibliography  Save this article

The Drivers of Stock Market Growth in Pakistan: How Relevant is Irrelevant?

Author

Listed:
  • Areeba Khan
  • Quratul Ain
  • Hafiz Abdur Rashid

Abstract

Pakistan’s stock market has experienced severe downside volatility after its classification in MSCI’s emerging market index in 2016. Global pandemic, political instability and capital limitations through money laundering control mechanisms have exposed the foundations of capital allocation to an escalating risk of default. The situation prerequisites a review of contentious relationship between drivers of economic growth and stock market expansion.This paper seeks to examine the relationship between non-financial and banal drivers of economic growth and their relative impact on stock market development in Pakistan, building on the fact that financial market development is a direct outcome of economic growth and development of the generic capabilities of production and capital formation through profit trails.GMM approach is used to analyze the contribution of capital formation and allocation through generic productivity and risk allocation mechanism. The paper discusses GDP growth, Gross fixed capital formation, Private credit and use of IMF credit as instrumental in determining stock market expansion. Originality of the research transpires from the fact that key outputs of real sector have been added to analyze the development of financial market which have long been ignored as extraneous for empirical analysis.

Suggested Citation

  • Areeba Khan & Quratul Ain & Hafiz Abdur Rashid, 2020. "The Drivers of Stock Market Growth in Pakistan: How Relevant is Irrelevant?," Journal of Accounting and Finance in Emerging Economies, CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan, vol. 6(4), pages 1189-1197, December.
    • Handle: RePEc:src:jafeec:v:6:y:2020:i:4:p:1189-1197
    DOI: http://doi.org/10.26710/jafee.v6i4.1479
    as

    Download full text from publisher

    File URL: https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/1479/1040
    Download Restriction: no
    File URL: https://libkey.io/http://doi.org/10.26710/jafee.v6i4.1479?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:src:jafeec:v:6:y:2020:i:4:p:1189-1197. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rabia Rasheed (email available below). General contact details of provider: https://edirc.repec.org/data/csrcmpk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.