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What Drives Stock Market Development in Arab Countries?

Author

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  • Chiad, Faycal
  • Hadj Sahraoui, Hamoudi

Abstract

Arab stock exchanges have witnessed tremendous growth in recent decades, and the number of listed companies and the size of stock market capitalization have increased. In the light of this remarkable growth, this study aims to find out what are the most important determinants and economic factors affecting this development during the period 2006– 2017. By employing panel data models, we find that trade openness; market liquidity, money supply and economic growth have positive impacts on stock market development, whereas the global financial crisis has negative impact. Based on these results, measures should be taken to improve market liquidity, control of money supply, and maintain a balanced economic growth rate to promote the development of Arab stock exchanges. Policy recommendations are provided based on these findings.

Suggested Citation

  • Chiad, Faycal & Hadj Sahraoui, Hamoudi, 2021. "What Drives Stock Market Development in Arab Countries?," MPRA Paper 112035, University Library of Munich, Germany, revised 2021.
    • Handle: RePEc:pra:mprapa:112035
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    File URL: https://mpra.ub.uni-muenchen.de/112035/1/MPRA_paper_112035.pdf
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    References listed on IDEAS

    as
    1. Matias Braun & Claudio Raddatz, 2004. "Trade liberalization and the politics of financial development," Working Papers 04-3, Federal Reserve Bank of Boston.
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    3. Jamel Boukhatem, 2009. "Essai sur les déterminants empiriques de développement des marchés obligataires," EconomiX Working Papers 2009-32, University of Paris Nanterre, EconomiX.
    4. Charles Amo Yartey, 2008. "The Determinants of Stock Market Development in Emerging Economies: Is South Africa Different?," IMF Working Papers 2008/032, International Monetary Fund.
    5. Valeriano F. García & Lin Liu, 1999. "Macroeconomic Determinants of Stock Market Development," Journal of Applied Economics, Universidad del CEMA, vol. 2, pages 29-59, May.
    6. Valeriano F. Garcia & Lin Liu, 1999. "Macroeconomic Determinants of Stock Market Development," Journal of Applied Economics, Taylor & Francis Journals, vol. 2(1), pages 29-59, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Macroeconomic variables; stock markets development; Arab countries; panel data analysis;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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