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Dynamic relation between macroeconomic variable, stock market returns and stock market development in Ghana

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  • Richard Kofi Asravor
  • Prince Dieu‐Donne Fonu

Abstract

In recent times, the collapse of more than seven banks in Ghana and the raising of the minimum capital by the Central Bank of Ghana, have led to the argument that the stock market is the next best capital market for raising long terms funds. This study employs the ARDL cointegration approach to examine the long and short‐term relationship between macroeconomic variables and stock market returns and development in Ghana. We found out that cointegration exist between the macroeconomic variables and stock market return and stock market development. The study revealed that log of the money supply, inflation rate and human capital has a negative impact on the stock market development whereas the log of foreign direct investment and interest rate has a positive impact on stock market development.

Suggested Citation

  • Richard Kofi Asravor & Prince Dieu‐Donne Fonu, 2021. "Dynamic relation between macroeconomic variable, stock market returns and stock market development in Ghana," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 2637-2646, April.
    • Handle: RePEc:wly:ijfiec:v:26:y:2021:i:2:p:2637-2646
    DOI: 10.1002/ijfe.1925
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    2. Sue Abdinnour & Sesan Oluseyi Adeniji, 2023. "Empirical analysis of the impact of entrepreneurial activity on economic growth of Global Entrepreneurship Monitor (GEM) countries," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 13(1), pages 1-11, December.
    3. Richard Kofi Asravor & Frank Gyimah Sackey, 2023. "Impact of Technology on Macro-Level Employment and the Workforce: What are the Implications for Job Creation and Job Destruction in Ghana?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 168(1), pages 207-225, August.

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