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Equity markets and economic development: Does the primary market matter?

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  • Andriansyah, Andriansyah
  • Messinis, George

Abstract

This article examines the role played by primary and secondary equity markets in economic growth. It departs from standard literature to integrate both markets and explicitly acknowledge the primary equity market. By employing a variety of dynamic panel estimators for 54 countries over the period 1995-2010, we show that the primary equity market is not an important determinant of economic growth, although it facilitates the development of the secondary market. This study also confirms the importance of liquidity provided by the secondary market. The evidence here calls for further investigation into the capital-raising function of equity markets.

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  • Andriansyah, Andriansyah & Messinis, George, 2014. "Equity markets and economic development: Does the primary market matter?," MPRA Paper 116698, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:116698
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    Cited by:

    1. Andriansyah, Andriansyah & Messinis, George, 2016. "Intended use of IPO proceeds and firm performance: A quantile regression approach," Pacific-Basin Finance Journal, Elsevier, vol. 36(C), pages 14-30.
    2. Andriansyah, Andriansyah, 2016. "Savings and Investment in Indonesia," MPRA Paper 105254, University Library of Munich, Germany.
    3. Andriansyah, Andriansyah, 2017. "The Real Effect of Primary and Secondary Equity Markets on Firm Performance: Evidence from Indonesia," MPRA Paper 116696, University Library of Munich, Germany.
    4. Andriansyah & Asep Nurwanda & Bakhtiar Rifai, 2023. "Structural Change and Regional Economic Growth in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 59(1), pages 91-117, January.

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    More about this item

    Keywords

    Equity Markets; Primary Markets; Secondary Markets; Development;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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