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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...

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Detalles Bibliográficos
Autores principales: Omar, Abdullah Bin, Ali, Anis, Mouneer, Salma, Kouser, Robina, Al-Faryan, Mamdouh Abdulaziz Saleh
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Public Library of Science 2022
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.
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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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