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Stock market development and economic growth in Ghana: an ARDL-bounds testing approach

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  • Erasmus L. Owusu
  • Nicholas M. Odhiambo

Abstract

This article examines the relationship between stock market development and sustainable economic growth in Ghana. The study employs the recently developed ARDL-bounds testing approach and multidimensional stock market development proxies to examine this linkage. The article finds that in the long run, stock market developments and capital account liberalization policies have no positive effect on economic growth in Ghana. This finding supports the numerous past studies, which have reported negative or inconclusive results on the effects of stock market development on economic growth. The article, therefore, concludes that it is the increase in credit to the private sector, rather than stock market development that drives the real sector development in Ghana.

Suggested Citation

  • Erasmus L. Owusu & Nicholas M. Odhiambo, 2014. "Stock market development and economic growth in Ghana: an ARDL-bounds testing approach," Applied Economics Letters, Taylor & Francis Journals, vol. 21(4), pages 229-234, March.
    • Handle: RePEc:taf:apeclt:v:21:y:2014:i:4:p:229-234
    DOI: 10.1080/13504851.2013.844315
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    Cited by:

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    2. Simplice A. Asongu & Jacinta C. Nwachukwu, 2019. "ICT, Financial Sector Development and Financial Access," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(2), pages 465-490, June.
    3. Asongu, Simplice A., 2017. "Assessing marginal, threshold, and net effects of financial globalisation on financial development in Africa," Journal of Multinational Financial Management, Elsevier, vol. 40(C), pages 103-114.
    4. Simplice A. Asongu, Nicholas M. Odhiambo, 2022. "Information for banking efficiency in Africa: evidence from income levels and legal origins," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 19(2), pages 251-274, December.
    5. Simplice A. Asongu & Jules R. Minkoua N., 2018. "Dynamic openness and finance in Africa," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 27(4), pages 409-430, May.
    6. Simplice A. Asongu & Nicholas M. Odhiambo, 2022. "Information Sharing and Banking Efficiency in Africa: A Disaggregated Panel Data Analysis," Working Papers of the African Governance and Development Institute. 22/010, African Governance and Development Institute..
    7. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2017. "The synergy of financial sector development and information sharing in financial access: Propositions and empirical evidence," Research in International Business and Finance, Elsevier, vol. 40(C), pages 242-258.
    8. Simplice A. Asongu & John C. Anyanwu & Vanessa S. Tchamyou, 2019. "Technology-driven information sharing and conditional financial development in Africa," Information Technology for Development, Taylor & Francis Journals, vol. 25(4), pages 630-659, October.
    9. Asongu, Simplice A., 2017. "The effect of reducing information asymmetry on loan price and quantity in the African banking industry," Research in International Business and Finance, Elsevier, vol. 41(C), pages 185-197.
    10. Simplice A. Asongu & Paul N. Acha-Anyi, 2017. "ICT, conflicts in financial intermediation and financial access: evidence of synergy and threshold effects," Netnomics, Springer, vol. 18(2), pages 131-168, December.
    11. Fisayo Fagbemi & John Oluwasegun Ajibike, 2022. "West African Emerging Economies: Comparative Insights on Ghana’s and Nigeria’s Stock Market Development," American Journal of Economics and Business Administration, Science Publications, vol. 14(1), pages 55-67, December.
    12. Paetz, Michael & Gupta, Rangan, 2016. "Stock price dynamics and the business cycle in an estimated DSGE model for South Africa," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 44(C), pages 166-182.
    13. Simplice Asongu & Jacinta Nwachukwu, 2017. "Information asymmetry and conditional financial sector development," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 9(4), pages 372-392, November.
    14. Asongu, Simplice A. & Biekpe, Nicholas, 2018. "ICT, information asymmetry and market power in African banking industry," Research in International Business and Finance, Elsevier, vol. 44(C), pages 518-531.
    15. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "At what levels of financial development does information sharing matter?," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 3(1), pages 1-30, December.
    16. Ekundayo P. Mesagan & Isaac A. Ogbuji & Yasiru O. Alimi & Anthonia T. Odeleye, 2019. "Growth Effects of Financial Market Instruments: The Ghanaian Experience," Working Papers 19/095, European Xtramile Centre of African Studies (EXCAS).
    17. Isaac Azubuike Ogbuji & Ekundayo Peter Mesagan & Yasiru Olorunfemi Alimi, 2020. "The Dynamic Linkage between Money Market, Capital Market and Economic Growth in Ghana: New Lessons Relearned," Econometric Research in Finance, SGH Warsaw School of Economics, Collegium of Economic Analysis, vol. 5(2), pages 59-78, December.
    18. Edward Alabie Borteye & Williams Kwasi Peprah, 2022. "Correlates of Stock Market Development and Economic Growth: A Confirmatory Study from Ghana," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(3), pages 1-1, February.
    19. Erasmus L Owusu, 2016. "Stock Market and Sustainable Economic Growth in Nigeria," Economies, MDPI, vol. 4(4), pages 1-13, November.
    20. Yilmaz Bayar & Abdulkadir Kaya & Murat Yildirim, 2014. "Effects of Stock Market Development on Economic Growth: Evidence from Turkey," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 5(1), pages 93-100, January.

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