Effect of Stock Market Dynamics on Economic Growth: Evidence from Ghana Stock Exchange

Journal Title: International Journal of Financial Markets - Year 2016, Vol 2, Issue 3

Abstract

The purpose of this study was to examine the effect of stock market dynamics on economic growth. It relied on a quantitative time series approach, using real GDP as a measure of economic growth and aggregate stock price index, stock volume, stock value traded and market capitalization as proxies of Ghana stock exchange performance. Data was collected for 13 years (2000-2012) on all variables. The study employed Vector Error Correction Models (VECM) and Granger Causality Models to analyze the short and long run relationships between development of the Ghana Stock Exchange and economic growth in Ghana. The study found that the development of the Ghana Stock Exchange has short and long-run impacts on economic growth with a bi-directional causality between stock market development and economic growth. The study recommended, for further studies, an analysis of the long-run and short-run impact of Ghana Stock exchange performance on macroeconomic variables.

Authors and Affiliations

Rebecca Attah-Annor, Alhassan Bunyaminu

Keywords

Related Articles

A Proposal for Creating Real Effective Exchange Rate Monthly Frequency Series for Albania

The present work is trying to cover the need for a Real Exchange Effective Rate in Albania. The bank of the country didn’t tend to keep this series which is important for competitiveness measure, encloses political risk...

How Causal Dimensions of Product Harm Crises Shape Firm’s Financial Status: from Sri Lankan’s Moral Reputational Perspective

Causative dimensions of product harm crisis influence how a consumer responds. This research explores through a new empirical angle and makes several unique contributions to the existing marketing literature by explori...

Basel III and Prudent Risk Management in Banking

This paper analyzes whether or not Basel III can sanitize the banking industry and enhance prudent risk management tendencies. The paper analyzes the framework and juxtaposes the drawbacks against the potential benefit...

My Data: A new Prediction Model Simulator for Stock Market

Over the last few decades, the average person's interest in the stock market has grown exponentially. This demand coupled with advances in trading technology has opened up the markets so that nowadays nearly anybody ca...

How Do Firms with Financial Constraints Manage Liquidity?

Firms with financial constraints need to maintain cash and cash equivalent at an optimal level. Lack of liquid assets sends a negative signal to the market, leading to a potential collapse of the stock prices. The ineff...

Download PDF file
  • EP ID EP28718
  • DOI -
  • Views 289
  • Downloads 8

How To Cite

Rebecca Attah-Annor, Alhassan Bunyaminu (2016). Effect of Stock Market Dynamics on Economic Growth: Evidence from Ghana Stock Exchange. International Journal of Financial Markets, 2(3), -. https://europub.co.uk/articles/-A-28718