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Capital Accumulation in Less Developed Countries: Does Stock Market Matter?

  • Sarkar, Prabirjit

Our panel data analysis (1988-2002) of a sample of 31 less developed countries (LDCs) shows that the stock market capitalization as a percentage of GDP- an important indicator of stock market development- has no relationship with the growth rates of gross fixed capital formation (GGKF). Our time series analysis (1976-2002) of 16 LDCs shows that in 11 cases there is no meaningful relationship between the stock market turnover ratio and the growth of capital accumulation (GGKF). For 5 LDCs (belonging to the so-called French-origin civil law category) with low shareholder protection we get a positive long-term relationship.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 5053.

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Date of creation: 05 Jul 2007
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Handle: RePEc:pra:mprapa:5053
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  1. Levine, Ross & Zervos, Sara, 1998. "Stock Markets, Banks, and Economic Growth," American Economic Review, American Economic Association, vol. 88(3), pages 537-58, June.
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  5. Philip Arestis & Panicos O. Demetriades & Kul B. Luintel, 1997. "Financial Development and Economic Growth: the Role of Stock Markets," Keele Department of Economics Discussion Papers (1995-2001) 97/05, Department of Economics, Keele University.
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  7. Anonymous & RAHMAN, K. M. MOSTAFIZUR & AKBAR, MD. ALI & MIA, MD. IDRIS ALI & ALI, MRS RAFIQUNNESSA & RASHID, M. HARUN-AR & MIAN, MD. RAIS UDDIN, 2007. "Contents," Bangladesh Journal of Agricultural Economics, Bangladesh Agricultural University, vol. 30(2).
  8. Lopez-de-Silanes, Florencio & Djankov, Simeon & La Porta, Rafael & Shleifer, Andrei, 2008. "The Law and Economics of Self-dealing," Scholarly Articles 2907526, Harvard University Department of Economics.
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  12. Editor, 2007. "Contents," The Journal of Comparative Economic Studies (JCES), The Japanese Society for Comparative Economic Studies (JSCES), vol. 3, pages 0-0, December.
  13. Sarkar, Prabirjit, 2007. "Stock Market Development and Capital Accumulation: Does Law Matter? A Case Study of India," MPRA Paper 5052, University Library of Munich, Germany.
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