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Macroeconomic Determinants Of Stock Market Development: Evidence From Borsa Istanbul

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  • BAYAR, Yılmaz

    (Usak University, Department of Economics)

Abstract

Stock markets have experienced significant improvements especially during the past 30 years, fostered economic growth and become one of the important leading indicators for the economies. Economic growth, saving rate, banking sector development, trade openness, foreign direct investments, institutional quality and stock market liquidity are found to be major determinants behind stock market development in the literature. This study investigates major macroeconomic determinants of stock market development in Turkey during the period 2005:Q1-2015:Q3 using ARDL cointegration, Toda and Yamamoto (1995) causality test and regression analysis. We also found that both economic growth and stock market liquidity had positive impact on stock market development in the long run, while inflation had negative impact on stock market development in the long run.

Suggested Citation

  • BAYAR, Yılmaz, 2016. "Macroeconomic Determinants Of Stock Market Development: Evidence From Borsa Istanbul," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 20(1), pages 69-89.
  • Handle: RePEc:vls:finstu:v:20:y:2016:i:1:p:69-89
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    References listed on IDEAS

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    Cited by:

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    2. Sheilla Nyasha & Nicholas M. Odhiambo, 2020. "Determinants of the Brazilian Stock Market Development," Journal of Developing Areas, Tennessee State University, College of Business, vol. 54(1), pages 53-64, January-M.
    3. Sin-Yu Ho & N.M. Odhiambo, 2018. "Analysing the macroeconomic drivers of stock market development in the Philippines," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1451265-145, January.
    4. Shahida Perveen, Mustaghis-ur-Rahman, 2018. "Impact of Fiscal and Monetary Policies on Stock Market Performance: An Empirical Study of Pakistan Stock Exchange," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 3(2), pages 2-23, October.
    5. Sin-Yu Ho & Nicholas M. Odhiambo, 2019. "The macroeconomic drivers of stock market development: evidence from Hong Kong," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 12(2), pages 185-207, July.

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    More about this item

    Keywords

    Macroeconomic Variables; Banking Sector; Stock Market; Time Series Analysis; Turkey;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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