Title: The macroeconomic determinants of stock market development in Malaysia: an empirical analysis

Authors: Sin-Yu Ho

Addresses: Department of Economics, University of South Africa, P.O. Box 392, UNISA, 0003, Pretoria, South Africa

Abstract: This study examines the macroeconomic determinants of stock market development in Malaysia during the period 1981 to 2015. Specifically, it investigates the impact of banking sector development, economic performance, the inflation rate, foreign direct investment and trade openness on the development of the Malaysian stock market. The results show that economic performance and trade openness have positive and significant long-run impacts, whereas banking sector development has a negative and significant long-run impact on stock market development. In the short run, the results indicate that the previous periods of banking sector development, as well as current and previous periods of trade openness, have had positive impacts on stock market development. These findings have practical policy implications.

Keywords: macroeconomic determinants; stock market development; SMD; Malaysia; ARDL bounds testing.

DOI: 10.1504/GBER.2019.098083

Global Business and Economics Review, 2019 Vol.21 No.2, pp.174 - 193

Received: 22 May 2017
Accepted: 25 Aug 2017

Published online: 18 Dec 2018 *

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