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Dynamic impacts of SME stock market development and innovation on macroeconomic indicators: A Post-Keynesian approach

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  • Nguyen, Trang
  • Chaiechi, Taha
  • Eagle, Lynne
  • Low, David

Abstract

This study is grounded on the propositions of Kaleckian–Post-Keynesian​ macroeconomic framework to explore the dynamic impacts of SME (Small and Medium Enterprise) stock market development and innovation on key macroeconomic variables in Hong Kong, Singapore, Thailand, and Malaysia. For the reported empirical analysis, a Structural Vector Error Correction (SVEC) model and an impulse response function (IRF) were adopted. The evidence shows that SME stock market development and/or innovation have small but positive impacts on short-run economic stimulation. The SME stock market development promotes economic growth through the combination of the following channels: private investment, savings and productivity in Hong Kong, Singapore, and Thailand. Innovation, on the other hand, fosters growth through the combination of these channels and the employment channel in all four countries.

Suggested Citation

  • Nguyen, Trang & Chaiechi, Taha & Eagle, Lynne & Low, David, 2020. "Dynamic impacts of SME stock market development and innovation on macroeconomic indicators: A Post-Keynesian approach," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 327-347.
    • Handle: RePEc:eee:ecanpo:v:68:y:2020:i:c:p:327-347
    DOI: 10.1016/j.eap.2020.10.002
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    More about this item

    Keywords

    SME stock market; Innovation; Post-Keynesian economics; Structural VEC; Impulse response analysis;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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