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Stock Market and Economic Growth in China

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  • Baotai Wang

    ()
    (University of Northern British Columbia)

  • D. Ajit

    ()
    (University of Northern British Columbia)

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    Abstract

    This study investigates the impact of stock market development on economic growth in China. To this end, the quarterly data from 1996 to 2011 are used and the empirical investigation is conducted within the unit root and the cointegration framework. The results show that the relationship between the stock market development, proxied by the total market capitalization, and economic growth is negative. This result is consistent with Harris'(1997) finding that the stock market development generally does not contribute positively to economic growth in developing countries if the stock market is mainly an administratively-driven market.

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    Bibliographic Info

    Article provided by AccessEcon in its journal Economics Bulletin.

    Volume (Year): 33 (2013)
    Issue (Month): 1 ()
    Pages: 95-103

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    Handle: RePEc:ebl:ecbull:eb-12-00940

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    Related research

    Keywords: Stock Market; Economic Growth; Unit Root; Cointegration;

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    References

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    1. Levine, Ross & Zervos, Sara, 1996. "Stock market development and long-run growth," Policy Research Working Paper Series, The World Bank 1582, The World Bank.
    2. Burdekin, Richard C.K. & Redfern, Luke, 2009. "Sentiment effects on Chinese share prices and savings deposits: The post-2003 experience," China Economic Review, Elsevier, Elsevier, vol. 20(2), pages 246-261, June.
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