The development of the stock market and its effect on economic growth : the case of SADC

Elliott, Kevin Andrew (2009) The development of the stock market and its effect on economic growth : the case of SADC. Masters thesis, Rhodes University.

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Abstract

Using a pooled panel data set from nine developing countries within the SADC region from 1992 to 2004, this paper empirically examines; firstly, the relationship between stock market development and long-term economic growth, and secondly, the macroeconomic determinants of stock market development, particularly market capitalisation as a percentage of GDP. The results suggest that there is a strong link between stock market development and economic growth, particularly through the liquidity provided by the market. The evidence obtained lends support to the view that a well-developed and functioning stock market can boost economic growth by enhancing faster capital accumulation and allowing for better resource allocation, particularly in developing countries. In terms of the macroeconomic determinants of stock market development, the results support those of Garcia and Liu (1999), in that we found the indicators of financial intermediary development, the value of shares traded as a percentage of GDP and the macroeconomic instability variable to be important determinants of stock market development.

Item Type:Thesis (Masters)
Uncontrolled Keywords:SADC, Stock exchange, Southern Africa, Economic growth
Subjects:H Social Sciences > HC Economic History and Conditions
Divisions:Faculty > Faculty of Commerce > Economics and Economic History
ID Code:2567
Deposited By: Mrs Carol Perold
Deposited On:04 Apr 2012 07:17
Last Modified:04 Apr 2012 07:17
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