Stock Market Development and Economic Growth

Contemporary economies of developing countries are changing due to rapid changes in the world economy. The economies of emerging market countries are witnessing changes in the composition of capital flows because world stock markets are expanding rapidly. Foreign direct investment and stock market boom are the indicators of the changing world economic order. Hence, Stock market has been associated with economic growth through its role as source for new private capital. On the other hand, stock market development is the catalyst for economic growth. The purpose of this study examines the relationship between stock market development and economic Growth. Empirically, based on the data for Emerging market and developed market countries during the 10 years period, from 1999 2008 using the generalized method of moments (GMM) for dynamic panel method approach. To control for the country specific effect, the model is further estimated for the developed and emerging member countries.

Autorentext

Mr. Abiy Hailemariam is a Consultant at the United Nation Economic Commission for Africa since 2011.He obtained his master of Economics in June, 2011 in Financial Engineering from Xiamen University, During his professional experience and graduate study he has conducted various research works in different projects including his master thesis.