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Do Stock Markets Promote Economic Growth

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Author Info

  • Randall K. Filer
  • Jan Hanousek
  • Nauro F. Campos

Abstract

One of the most enduring debates in economics is whether financial development causes economic growth or whether it is a consequence of increased economic activity. Little research into this question, however has used a true causality framework. This paper fills this lacuna by using Granger-causality tests to provide evidence of a positive and significant causal relationship going from stock market development to economic growth, particularly for less developed countries.

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File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp267.pdf
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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 267.

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Length: pages
Date of creation: 01 Sep 1999
Date of revision:
Handle: RePEc:wdi:papers:1999-267

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Keywords: stock market; financial development; economic growth; Granger causality;

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References

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Citations

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Cited by:
  1. Stepan Jurajda & Janet Mitchell, 2001. "Markets and Growth," GE, Growth, Math methods 0111001, EconWPA.
  2. M. Olufemi Saibu, 2012. "An analysis of causal nexus between foreign direct investment, exchange rate and financial market development in Nigeria (1970 to 2009)," African Journal of Economic and Sustainable Development, Inderscience Enterprises Ltd, vol. 1(1), pages 95-102.
  3. Barry Harrison & David Paton, 2005. "Transition, the Evolution of Stock Market Efficiency and Entry into EU: The Case of Romania," Economic Change and Restructuring, Springer, vol. 37(3), pages 203-223, 09.
  4. Marques, Luís Miguel & Fuinhas, José Alberto & Marques, António Cardoso, 2012. "Interação entre o mercado acionista e o crescimento económico: Uma apreciação do caso português (1993-2010)
    [Interaction between the stock market and economic growth: An assessment of the Por
    ," MPRA Paper 39808, University Library of Munich, Germany.
  5. P., Srinivasan, 2014. "Stock Market Development and Economic growth in India: An Empirical Analysis," MPRA Paper 55657, University Library of Munich, Germany.

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