IDEAS home Printed from https://ideas.repec.org/a/ids/ijbema/v6y2014i3p271-282.html
   My bibliography  Save this article

Stock market development and economic growth in Sri Lanka

Author

Listed:
  • Athambawa Jahfer
  • Tohru Inoue

Abstract

This paper investigates the relationship between stock market development and economic growth in Sri Lanka using quarterly data from 1996 to 2011. The stationary of the data are tested using Augmented Dickey Fuller (ADF) test. It was found that all variables are stationary on first differencing. The relationships between economic growth and indicators of stock market development were investigated using Johansen co-integration tests, and vector error correction model (VECM). Co-integration results indicate the existence of long-run association between stock market development and economic growth in Sri Lanka. VECM results show unidirectional causality from stock market development to economic growth despite different variables used to measure the stock market development. The findings support the theoretical prediction that development of stock market would play a key role in economic growth. The study therefore concludes that stock market development leads the economic growth in Sri Lanka and efforts should be devoted to develop the stock market.

Suggested Citation

  • Athambawa Jahfer & Tohru Inoue, 2014. "Stock market development and economic growth in Sri Lanka," International Journal of Business and Emerging Markets, Inderscience Enterprises Ltd, vol. 6(3), pages 271-282.
    • Handle: RePEc:ids:ijbema:v:6:y:2014:i:3:p:271-282
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=63888
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Md. Qamruzzaman & Jianguo Wei, 2018. "Financial Innovation, Stock Market Development, and Economic Growth: An Application of ARDL Model," IJFS, MDPI, vol. 6(3), pages 1-30, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijbema:v:6:y:2014:i:3:p:271-282. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=249 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.