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Stock Market Development and Economic Growth: The Case of MSCI Emerging Market Index Countries

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Global Financial Crisis and Its Ramifications on Capital Markets

Part of the book series: Contributions to Economics ((CE))

Abstract

Aim of this study is to empirically investigate the role of stock market development on economic growth of the emerging markets listed in MSCI Emerging Market Index using annual data over the period from 1995 to 2012. We employ Panel Data Analysis to examine this relationship. The MSCI Emerging Market Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Market Index consists of the following 19 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Morocco, Mexico, Peru, Philippines, Poland, Russia, South Africa, Korea, Thailand, and Turkey. Among the stock market development indicators used in the study, stock market capitalization ratio is used as a proxy for market size while value traded ratio and turnover ratio are used as proxies for market liquidity. The individual indicators of stock market development reveal that the market capitalization and turnover ratios robustly and positively influence the level of economic growth.

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Authors and Affiliations

  1. The Faculty of Economics and Business Administration, Business Department, Erciyes University, 38039, Kayseri, Turkey

    Veli Akel & Talip Torun

Authors
  1. Veli Akel
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  2. Talip Torun
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Correspondence to Veli Akel .

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Editors and Affiliations

  1. Istanbul Medipol University, Istanbul, Turkey

    Ãœmit HacioÄŸlu

  2. Istanbul Medipol University, Istanbul, Turkey

    Hasan Dinçer

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Akel, V., Torun, T. (2017). Stock Market Development and Economic Growth: The Case of MSCI Emerging Market Index Countries. In: Hacioğlu, Ü., Dinçer, H. (eds) Global Financial Crisis and Its Ramifications on Capital Markets. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-47021-4_23

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