The determinants of economic growth in Pakistan: does stock market development play a major role?

Rahman, Mohammad Mafizur and Salahuddin, Mohammad (2010) The determinants of economic growth in Pakistan: does stock market development play a major role? Economic Issues, 15 (2). pp. 69-86. ISSN 1363-7029

Abstract

This paper provides an empirical analysis of the relationship between economic growth and its determinants, with special focus on stock market development in Pakistan. Using data for the period from 1971 to 2006, we employ FMOLS and ARDL bounds-testing for the long run relationship and ECM for the short run dynamics. The findings suggest a positive relationship between efficient stock markets and economic growth, both in short run and long run. Financial instability and inflation have negative effects while human capital, foreign direct investment and stock market liquidity have positive effects on growth. The results are consistent with the theoretical and empirical predictions.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Copyright Economic Issues Education Fund.
Depositing User: Dr Mafiz Rahman
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 08 Dec 2010 01:49
Last Modified: 03 Jul 2013 00:06
Uncontrolled Keywords: stock market development; economic growth; co-integration
Fields of Research (FOR2008): 14 Economics > 1402 Applied Economics > 140202 Economic Development and Growth
14 Economics > 1403 Econometrics > 140305 Time-Series Analysis
Socio-Economic Objective (SEO2008): B Economic Development > 91 Economic Framework > 9199 Other Economic Framework > 919999 Economic Framework not elsewhere classified
URI: http://eprints.usq.edu.au/id/eprint/9035

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