A STUDY OF INTERLINKAGE BETWEEN STOCK MARKET AND GDP GROWTH
European Journal of Molecular & Clinical Medicine,
2020, Volume 7, Issue 10, Pages 3860-3866
AbstractThis study researched the job of securities exchange development on financial development of a country. This is a comparative type of paper where references from various papers have been taken into account to reach the final conclusion.The study investigates the connection between financial market advancement records and monetary development. The papers taken into account showed both side of the interlinkage. The results show that stock market indices and the economic growth have a very weak correlation which is almost negligible. This result implies that only stock market cannot be taken into account for analyzing the relation, various factors like market capitalization, liquidity have also to be taken into account. We should see with alert the thought that securities exchange size isn't critical for monetary development since multi-collinearity existed in the information utilized by different analysts for similar studies. The public authority should make approaches that support the premium of homegrown financial backers as this would spike financial backers' premium and lift securities exchange action.
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