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Stock market and economic growth in Eastern Europ

Author

Listed:
  • María A. Prats

    (Universidad de Murcia)

  • Beatriz Sandoval

    (Universidad de Murcia)

Abstract

A developed financial system is essential in a market economy. Similarly, economic growth is very important for institutions and economic policy. This paper studies the importance of the development of financial markets in general, and stock market in particular, from the review of existing literature in the area of the relationship between financial development and economic growth, and especially, the link between stock market and economic growth. Through an empirical analysis for six countries in Eastern Europe (Bulgaria, Slovakia, Hungary, Poland, Czech Republic and Romania), it is tried to show the link between the development of stock market and economic growth in these countries from 1995 to 2012 in order to deep in their transition processes, from communist to market economies, that began with the fall of the Berlin Wall in 1989. The results show evidence of Granger causality with economic growth variables and financial market variables.

Suggested Citation

  • María A. Prats & Beatriz Sandoval, 2016. "Stock market and economic growth in Eastern Europ," Working Papers 16-09, Asociación Española de Economía y Finanzas Internacionales.
    • Handle: RePEc:aee:wpaper:1609
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    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.
    2. Lidiya Yemelyanova, 2021. "Relationship Between The Stock Market Development, Banking Sector Development And Economic Growth In The Cee Countries," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 7(3).
    3. Yusuf, Ismaila Akanni & Salaudeen, Mohammed Bashir & Agbonrofo, Hope, 2021. "Social and Economic Drivers of Stock Market Performance in Nigeria," MPRA Paper 111086, University Library of Munich, Germany.

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    Keywords

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    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G2 - Financial Economics - - Financial Institutions and Services

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