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Is stock market development sensitive to macroeconomic indicators? A fresh evidence using ARDL bounds testing approach
Over the past decades, emerging stock markets have started to significantly contribute to economic growth through mobilizing long-term capital by pooling funds, facilitating savings and investments into profitable projects and improving corporate governance structure. A plethora of empirical studies...
Autores principales: | , , , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Public Library of Science
2022
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9581411/ https://www.ncbi.nlm.nih.gov/pubmed/36260625 http://dx.doi.org/10.1371/journal.pone.0275708 |
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author | Omar, Abdullah Bin Ali, Anis Mouneer, Salma Kouser, Robina Al-Faryan, Mamdouh Abdulaziz Saleh |
author_facet | Omar, Abdullah Bin Ali, Anis Mouneer, Salma Kouser, Robina Al-Faryan, Mamdouh Abdulaziz Saleh |
author_sort | Omar, Abdullah Bin |
collection | PubMed |
description | Over the past decades, emerging stock markets have started to significantly contribute to economic growth through mobilizing long-term capital by pooling funds, facilitating savings and investments into profitable projects and improving corporate governance structure. A plethora of empirical studies is devoted to investigate the determinants of different capital markets but due to highly controversial and inconclusive findings about macroeconomic determinants, this study contributes to the body of existing literature by empirically investigating the macroeconomic forces that drive the stock market development of Pakistan from 1980 to 2019. By applying Ng-Perron and Zivot-Andrews unit root tests (to determine the integrating orders of variables) and Autoregressive Distributed Lag (ARDL) bounds testing approach, our results confirm cointegration among variables and exhibit the significant positive impact of economic growth and banking sector development on stock market development and negative affect of inflation, foreign direct investment and trade openness on it in long run. At the same time, the short run results show a significant relationship of economic growth, inflation and foreign direct investment with stock market development. Our study has some important policy implications. |
format | Online Article Text |
id | pubmed-9581411 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2022 |
publisher | Public Library of Science |
record_format | MEDLINE/PubMed |
spelling | pubmed-95814112022-10-20 Is stock market development sensitive to macroeconomic indicators? A fresh evidence using ARDL bounds testing approach Omar, Abdullah Bin Ali, Anis Mouneer, Salma Kouser, Robina Al-Faryan, Mamdouh Abdulaziz Saleh PLoS One Research Article Over the past decades, emerging stock markets have started to significantly contribute to economic growth through mobilizing long-term capital by pooling funds, facilitating savings and investments into profitable projects and improving corporate governance structure. A plethora of empirical studies is devoted to investigate the determinants of different capital markets but due to highly controversial and inconclusive findings about macroeconomic determinants, this study contributes to the body of existing literature by empirically investigating the macroeconomic forces that drive the stock market development of Pakistan from 1980 to 2019. By applying Ng-Perron and Zivot-Andrews unit root tests (to determine the integrating orders of variables) and Autoregressive Distributed Lag (ARDL) bounds testing approach, our results confirm cointegration among variables and exhibit the significant positive impact of economic growth and banking sector development on stock market development and negative affect of inflation, foreign direct investment and trade openness on it in long run. At the same time, the short run results show a significant relationship of economic growth, inflation and foreign direct investment with stock market development. Our study has some important policy implications. Public Library of Science 2022-10-19 /pmc/articles/PMC9581411/ /pubmed/36260625 http://dx.doi.org/10.1371/journal.pone.0275708 Text en © 2022 Omar et al https://creativecommons.org/licenses/by/4.0/This is an open access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. |
spellingShingle | Research Article Omar, Abdullah Bin Ali, Anis Mouneer, Salma Kouser, Robina Al-Faryan, Mamdouh Abdulaziz Saleh Is stock market development sensitive to macroeconomic indicators? A fresh evidence using ARDL bounds testing approach |
title | Is stock market development sensitive to macroeconomic indicators? A fresh evidence using ARDL bounds testing approach |
title_full | Is stock market development sensitive to macroeconomic indicators? A fresh evidence using ARDL bounds testing approach |
title_fullStr | Is stock market development sensitive to macroeconomic indicators? A fresh evidence using ARDL bounds testing approach |
title_full_unstemmed | Is stock market development sensitive to macroeconomic indicators? A fresh evidence using ARDL bounds testing approach |
title_short | Is stock market development sensitive to macroeconomic indicators? A fresh evidence using ARDL bounds testing approach |
title_sort | is stock market development sensitive to macroeconomic indicators? a fresh evidence using ardl bounds testing approach |
topic | Research Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9581411/ https://www.ncbi.nlm.nih.gov/pubmed/36260625 http://dx.doi.org/10.1371/journal.pone.0275708 |
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