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Capital Market Efficiency and Economic Growth: Evidence from Bangladesh

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  • Fakrul Ahmed
  • Md Ataur Rahman Chowdhury

Abstract

This study explores the influence of capital market efficiency on Bangladesh’s economic growth, using time series data covering market capitalization, total market turnover, and stock price indices from 2011 to 2022. The application of a multiple regression model reveals that the Bangladesh capital market has the potential to contribute significantly to the country’s economic growth. This potential is attributed to the notable characteristics of high market capitalization and relatively robust market liquidity. Consequently, it is recommended that market organizations and regulations be structured to attract a substantial number of both domestic and foreign investors, encouraging substantial listings, investments, and trading. Such measures are crucial to achieving the central objective of optimally allocating economic resources for the sustained and resilient growth of the nation.

Suggested Citation

  • Fakrul Ahmed & Md Ataur Rahman Chowdhury, 2024. "Capital Market Efficiency and Economic Growth: Evidence from Bangladesh," European Journal of Development Studies, European Open Science, vol. 4(2), pages 1-6, March.
    • Handle: RePEc:epw:develo:v:4:y:2024:i:2:id:15343
    DOI: 10.24018/ejdevelop.2024.4.2.343
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    References listed on IDEAS

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    1. Fakrul Ahmed, 2021. "Assessment of Capital Market Efficiency in COVID-19," European Journal of Business and Management Research, European Open Science, vol. 6(3), pages 42-46, May.
    2. Washeka Anjom & Abu Taher Mohammad Omor Faruq, 2023. "Financial Stability Analysis of Islamic Banks in Bangladesh," European Journal of Business and Management Research, European Open Science, vol. 8(3), pages 320-326, April.
    3. Paramahansa Pramanik, 2020. "Optimization of Market Stochastic Dynamics," SN Operations Research Forum, Springer, vol. 1(4), pages 1-17, December.
    4. Fakrul Ahmed, 2021. "Corporate Boards, Audit Committees and Voluntary Disclosure: A Case Analysis on Bangladeshi Listed Companies," European Journal of Business and Management Research, European Open Science, vol. 6(2), pages 153-155, March.
    5. Pagano, Marco, 1993. "Financial markets and growth: An overview," European Economic Review, Elsevier, vol. 37(2-3), pages 613-622, April.
    6. Gautam Kumar Biswas, 2023. "Financial Inclusion and Its Impact on Economic Growth: An Empirical Evidence from South Asian Countries," European Journal of Business and Management Research, European Open Science, vol. 8(4), pages 163-167, July.
    7. Md. Fazlul Huq Khan & Md. Masum Billah, 2023. "Macroeconomic factors and Stock exchange return: A Statistical Analysis," Papers 2305.02229, arXiv.org.
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