The Relationship between Economic Growth and Stock Market

Authors

  • Mohammad Alawin
  • Adnan Tariq Ali
  • Ebrahim Merza

Abstract

This study aims at examining the causality between economic growth and the performance of stock markets in two countries, Nigeria and United Arab Emirates (UAE), for the period of 2004-2015. The variables that will represent economic growth will be the gross domestic product (GDP) and foreign direct investment (FDI). The variables utilized for the stock market will be the total traded value of shares per year, the market capitalization value and the turnover ratio. Results show there is a causal relation between economic growth and the stock market in Nigeria and UAE. Empirical evidence suggests there is a unidirectional relationship from the stock market toward the GDP and FDI. The findings imply that stock market development stimulates economic growth. Thus, it can be concluded that in order to promote economic growth, these countries should work on supporting and developing the stock market.

Keywords: Causality, Economic Growth, Stock Market, Nigeria, United Arab Emirates.

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How to Cite

Alawin, M., A. T. Ali, and E. Merza. “The Relationship Between Economic Growth and Stock Market”. International Journal of Advances in Management and Economics, Aug. 2018, pp. 01-08, https://managementjournal.info/index.php/IJAME/article/view/123.