Stock market and economic growth of Malaysia, Thailand and Indonesia
This study aims to determine the long run and short run relationship between stock market development and economic growth of Malaysia, Thailand and Indonesia. This study was using time series data from 1988 until 2012 for Malaysia and Thailand; 1989 until 2012 for Indonesia. The dependent variable w...
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| Format: | Thesis |
| Language: | English English |
| Published: |
2016
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| Subjects: | |
| Online Access: | https://eprints.ums.edu.my/id/eprint/37600/1/24%20PAGES.pdf https://eprints.ums.edu.my/id/eprint/37600/2/FULLTEXT.pdf https://eprints.ums.edu.my/id/eprint/37600/ |
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| Summary: | This study aims to determine the long run and short run relationship between stock market development and economic growth of Malaysia, Thailand and Indonesia. This study was using time series data from 1988 until 2012 for Malaysia and Thailand; 1989 until 2012 for Indonesia. The dependent variable was GDP per capita while the independent variables included stock market development indicators which were market capitalization ratio and value traded ratio to represent the size and liquidity of the stock market, respectively. The variables of discount rate and openness ratio included as control variables. The long run and short run relationship between stock market and economic growth were determined by using Autoregresslve Distributed (ARDL) bounds test and Error Correction Model (ECM), respectively. The empirical results have shown that the size of Malaysian stock market has positive long run relationship to economic growth while liquidity of Malaysian stock market boosts economic growth in long run and short run. The size and liquidity of Thailand stock market have positive long run and short run impact to economic growth. For Indonesia, liquidity of Indonesian stock market has an effect on economic growth in long run and short run but the size of Indonesian stock market is not a responsible factor to lead economic growth. The well-functioning and well-developed stock market promotes economic growth. The private sector and government sector can contribute some strategies to improve the economic growth in the future such as internationalize the stock market, use advance technology system, innovate the new products, educate and build confidence of the investors. |
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