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Dynamic relation between macroeconomic variable, stock market returns and stock market development in Ghana
Author(s) -
Asravor Richard Kofi,
Fonu Prince DieuDonne
Publication year - 2021
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.1925
Subject(s) - economics , stock market , cointegration , stock market bubble , restricted stock , monetary economics , primary market , stock (firearms) , market depth , financial economics , econometrics , mechanical engineering , paleontology , horse , engineering , biology
In recent times, the collapse of more than seven banks in Ghana and the raising of the minimum capital by the Central Bank of Ghana, have led to the argument that the stock market is the next best capital market for raising long terms funds. This study employs the ARDL cointegration approach to examine the long and short‐term relationship between macroeconomic variables and stock market returns and development in Ghana. We found out that cointegration exist between the macroeconomic variables and stock market return and stock market development. The study revealed that log of the money supply, inflation rate and human capital has a negative impact on the stock market development whereas the log of foreign direct investment and interest rate has a positive impact on stock market development.