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Stock Market Development and Capital Accumulation: What the Time Series Evidence Shows

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  • Sarkar, Prabirjit

Abstract

The present study analysed time series data of 37 developed and less developed countries over the period 1976-2002. It shows that in the majority of cases (including France, UK and USA) the stock market turnover ratio - an important indicator of stock market development- has no positive long-term relationship with the growth rates of gross fixed capital formation. For some developed countries such as Austria, Italy, Japan and Germany and less-developed countries such as Chile, Egypt, Jamaica, Jordan, Philippines and Venezuela we get a positive long-term relationship. These are by and large the so-called French or German-origin civil law countries.

Suggested Citation

  • Sarkar, Prabirjit, 2007. "Stock Market Development and Capital Accumulation: What the Time Series Evidence Shows," MPRA Paper 5054, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:5054
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    References listed on IDEAS

    as
    1. Levine, Ross & Zervos, Sara, 1998. "Stock Markets, Banks, and Economic Growth," American Economic Review, American Economic Association, vol. 88(3), pages 537-558, June.
    2. Arestis, Philip & Demetriades, Panicos O & Luintel, Kul B, 2001. "Financial Development and Economic Growth: The Role of Stock Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(1), pages 16-41, February.
    3. Luigi Paganetto & Edmund S. Phelps (ed.), 2003. "Finance, Research, Education and Growth," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-4039-2023-2.
    4. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
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    Cited by:

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    More about this item

    Keywords

    stock market; capital accumulation; growth and liberalisation;
    All these keywords.

    JEL classification:

    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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