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What Drives Stock Market Development in the Middle East and Central Asia

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  • Andreas Billmeier
  • Isabella Massa

Abstract

In this paper, we assess the macroeconomic determinants of stock market capitalization in a panel of 17 countries in the Middle East and Central Asia, including both hydrocarbon-rich countries and economies without sizeable natural resource wealth. In addition to traditional variables, we include an institutional variable and remittances among the regressors. We find that (i) both institutions and remittances have a positive and significant impact on market capitalization; and (ii) both regressors matter, especially in countries without significant hydrocarbon sectors; whereas (iii) in resource-rich countries, stock market capitalization is mainly driven by the oil price.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/157.

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Length: 21
Date of creation: 01 Jul 2007
Date of revision:
Handle: RePEc:imf:imfwpa:07/157

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Keywords: Stock markets; Middle East and Central Asia; Natural resources; Oil prices; Workers remittances; Economic models; stock market; stock market capitalization; stock market development; domestic credit; financial markets; financial sector; capital markets; capital formation; financial sector development; international financial statistics; financial intermediaries; financial intermediation; investor confidence; stock market liquidity; financial structure; bond; financial intermediary development; financial market development; stock value; financial market; financial sector performance; equity market; commodity prices; capital flows; capital control; stock market developments; financial systems; equity markets;

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Citations

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Cited by:
  1. Isabella Massa & Andreas Billmeier, 2007. "Go Long or Short in Pyramids? News From the Egyptian Stock Market," IMF Working Papers 07/179, International Monetary Fund.
  2. Samya Beidas-Strom & Weicheng Lian & Ashwaq Maseeh, 2009. "The Housing Cycle in Emerging Middle Eastern Economies and its Macroeconomic Policy Implications," IMF Working Papers 09/288, International Monetary Fund.
  3. Ziesemer, Thomas, 2008. "Worker remittances, migration, accumulation and growth in poor developing countries," MERIT Working Papers 063, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  4. Kaouther Amiri & Ahlem Dakhlaoui & Besma Talibi, 2013. "Estimating Import Demand Function in Oil Exporting Countries: Panel Cointegration Approach," International Journal of Maritime, Trade & Economic Issues (IJMTEI), International Journal of Maritime, Trade & Economic Issues (IJMTEI), International Journal of Maritime, Trade & Economic Issues (IJMTEI), vol. 0(1), pages 33-48.
  5. Kamal, Mona, 2013. "Financial Development and Economic Growth in Egypt: A Re-investigation," MPRA Paper 48564, University Library of Munich, Germany.
  6. Kamal A. El-Wassal, 2013. "The Development of Stock Markets: In Search of a Theory," International Journal of Economics and Financial Issues, Econjournals, vol. 3(3), pages 606-624.
  7. Syed Raza & Syed Jawaid, 2014. "Foreign capital inflows, economic growth and stock market capitalization in Asian countries: an ARDL bound testing approach," Quality & Quantity: International Journal of Methodology, Springer, Springer, vol. 48(1), pages 375-385, January.
  8. Raza, Syed Ali & Jawaid, Syed Tehseen & Afshan, Sahar, 2013. "Is Stock Market Sensitive to Foreign Capital Inflows and Economic Growth? Evidence from Pakistan," MPRA Paper 48399, University Library of Munich, Germany.
  9. Nadeem Ilahi & Riham Shendy, 2008. "Do the Gulf Oil-Producing Countries Influence Regional Growth? T+L3886he Impact of Financial and Remittance Flows," IMF Working Papers 08/167, International Monetary Fund.

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