A Sectoral Analysis of the Role of Stock Market Development on Economic Growth: Empirical Evidence from Indian Economy

Sehrawat, Madhu and Giri, A.K. (2017) A Sectoral Analysis of the Role of Stock Market Development on Economic Growth: Empirical Evidence from Indian Economy. Global Business Review, 18 (4). pp. 911-923.

Text A271_MadhuSehrawat_sectoral analysis fo role of stock market_GBR2017.pdf Restricted to Registered users only Download (674kB) | Request a copy

Abstract

The present study examines the relationship between Indian stock market and economic growth from a sectoral perspective using quarterly time-series data from 2003:Q4 to 2014:Q4. The results of the autoregressive distributed lag (ARDL) approach bounds test confirm the existence of a cointegrating relationship between sector-specific gross domestic product (GDP) and sector-specific stock indi- ces. The empirical results reveal that sector-specific economic growth are significantly influenced by changes in the respective sector-specific stock price indices in the long run as well as in the short run. Apart from that, the control variables, such as trade openness and inflation, act as the instrument vari- ables in explaining the variations in the sector-specific GDP of the economy. The results of Granger causality test demonstrate unidirectional long-run as well as short-run causality running from sector specific stock prices to respective sector GDP. The findings suggest that economic growth of the coun- try is sensitive to respective sub-sector stock market investments. The findings highlight the reasons for cyclical and counter-cyclical business phase for the overall economy

Item Type:	Article
Uncontrolled Keywords:	Autoregressive distributed lag (ARDL) approach; Ng–Perron, Granger causality; stock market indices; economic growth; sector-specific GDP; India
Subjects:	?? Finance ??
Divisions:	Finance and Strategy
Depositing User:	Mr. Muralidhara D
Date Deposited:	12 Sep 2018 14:13
Last Modified:	12 Sep 2018 14:13
URI:	http://tapmi.informaticsglobal.com/id/eprint/80

Actions (login required)

View Item

Downloads