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Stock market and economic growth nexus in emerging markets: cointegration and causality analysis

Author

Listed:
  • Ekrem Erdem
  • Onur Gozbasi
  • M. Fatih Ilgun
  • Saban Nazlioglu

Abstract

The purpose of this study is to examine the short- and long-run relationships between stock market performance and economic growth for six emerging countries (Malaysia, Turkey, Mexico, Korea, India, and Brazil). To this end, the bounds testing approach to cointegration and Granger and Toda-Yamamoto causality tests are conducted for quarterly data. The results imply that there is a close relationship between stock market performance and economic growth in the long-run and that stock market performance is an impetus for economic growth in the short-run. The key finding of this study is that the relationship between stock market performance and economic growth is sensitive to the size of stock market.

Suggested Citation

  • Ekrem Erdem & Onur Gozbasi & M. Fatih Ilgun & Saban Nazlioglu, 2010. "Stock market and economic growth nexus in emerging markets: cointegration and causality analysis," International Journal of Business Forecasting and Marketing Intelligence, Inderscience Enterprises Ltd, vol. 1(3/4), pages 262-274.
    • Handle: RePEc:ids:ijbfmi:v:1:y:2010:i:3/4:p:262-274
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    Cited by:

    1. George Asumadu & Emmanuel Amo-Bediako, 2021. "Stock Market Performance and Economic Growth Nexus: A Panacea or Pain to Ghana?," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(4), pages 423-429, April.
    2. Totan Garai & Dipankar Chakraborty & Tapan Kumar Roy, 2016. "A multi-item periodic review probabilistic fuzzy inventory model with possibility and necessity constraints," International Journal of Business Forecasting and Marketing Intelligence, Inderscience Enterprises Ltd, vol. 2(3), pages 175-189.
    3. Apostolos G. Christopoulos & Spyros Papathanasiou & Petros Kalantonis & Andreas Chouliaras & Savvas Katsikides, 2014. "An Investigation of Cointegration and Casualty Relationships between the PIIGS’ Stock Markets," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 109-123.

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