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Macroeconomic Determinants of Stock Market Development

Author

Listed:
  • Valeriano F. García

    (World Bank)

  • Lin Liu

    (University of Kentucky)

Abstract

Using pooled data from fifteen industrial and developing countries from 1980 to 1995, this paper examines the macroeconomic determinants of stock market development, particularly market capitalization. The paper finds that: (1) real income, saving rate, financial intermediary development, and stock market liquidity are important determinants of stock market capitalization; (2) macroeconomic volatility does not prove significant; and (3) stock market development and financial intermediary development are complements instead of substitutes.

Suggested Citation

  • 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.
  • Handle: RePEc:cem:jaecon:v:2:y:1999:n:1:p:29-59
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    File URL: http://www.cema.edu.ar/publicaciones/download/volume2/garcia_liu.pdf
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    References listed on IDEAS

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