This document summarizes several research papers on the relationship between capital markets and economic growth in various countries. The papers find mixed results. Some papers find a positive relationship between stock market development and economic growth in countries like India, while others find no significant or even a negative relationship in countries like Romania, Western Balkan nations, and Nigeria. Recommendations include encouraging more companies to access capital markets to increase market size and liquidity, and improving market regulation and transparency to boost investor confidence.
This presentation shows a basic background on the monetary policy in Bangladesh showing the key features of the monetary policy introduced by Bangladesh Bank.
Measuring the Effect of Fixed Capital Formation in the Non-Oil Sector on Econ...inventionjournals
This study aimed in principle to measure the long-run effect of Fixed Capital Formation of the Non-Oil sector on the economic growth in kingdom of Saudi Arabia and whether the crowding-out of the current Expenditure to the capital Expenditure in KSA exists. To this end, the author based his research on the Johansen Co-integration Test, the Error Correction Model (ECM) and the Granger Causality Test. The results of the study have shown that there's a long-run equilibrium relationship between the growth rate of the Gross Fixed Capital Formation in Non-oil Sector (NOI) and changes that occur to the growth rate of the Gross Domestic Product at constant prices in Non-oil Sector (NOGDP). In addition, the study has reached the conclusion that a long-run change in the growth rate of the Non-oil Gross Fixed Capital Formation (NOI) by 1% will lead to a change in the growth rate of the Non-oil Gross Domestic Product (NOGDP) by 0.169%. The results made it clear that the relationship between changes in the constant- price NOI growth rate and changes in the (NOGDP) growth rate in the long run is a direct proportional relationship (the elasticity coefficient is positive; as the rise in the (NOI)growth rate will result in a rise in the (NOGDP) growth rate and vice versa. Moreover, the causality test results indicate that there's a two-way causal relationship between the growth rate of the Gross Fixed Capital Formation in Non-oil Sector (NOI) and changes in the growth rate of the constantprice GDP in Non-oil Sector(NOGDP). The results confirmed the the existence of crowding –out where the ratio of current Expenditure reached an average of 72.15% over the period 1974-2014. Capital Expenditure constituted only 28.85% of the total actual Expenditure for the same period. Usually sizable portion of the budget is allocated to this current Expenditure to meet an increasing wages and salaries of the public sector and other payments which asserts the imbalance in relative distribution of current and capital Expenditure which entails that Saudi authorities should take important decisions to increase the ratio of capital Expenditure at the expense of the current one specifically on wages and salaries. The researcher has offered a number of recommendations, among which the most significant ones are: The primary focus of the endeavour to stimulate and accelerate economic growth rates in the KSA should be based on achieving greater capital accumulation (i.e. increasing fixed capital formation), which the study proved to have a higher degree of elasticity with relation to economic growth in the long term, Another important recommendation is the need to direct a greater deal of government Expenditure in the KSA towards higher investment Expenditure, along with rationalizing current Expenditure.
This presentation shows a basic background on the monetary policy in Bangladesh showing the key features of the monetary policy introduced by Bangladesh Bank.
Measuring the Effect of Fixed Capital Formation in the Non-Oil Sector on Econ...inventionjournals
This study aimed in principle to measure the long-run effect of Fixed Capital Formation of the Non-Oil sector on the economic growth in kingdom of Saudi Arabia and whether the crowding-out of the current Expenditure to the capital Expenditure in KSA exists. To this end, the author based his research on the Johansen Co-integration Test, the Error Correction Model (ECM) and the Granger Causality Test. The results of the study have shown that there's a long-run equilibrium relationship between the growth rate of the Gross Fixed Capital Formation in Non-oil Sector (NOI) and changes that occur to the growth rate of the Gross Domestic Product at constant prices in Non-oil Sector (NOGDP). In addition, the study has reached the conclusion that a long-run change in the growth rate of the Non-oil Gross Fixed Capital Formation (NOI) by 1% will lead to a change in the growth rate of the Non-oil Gross Domestic Product (NOGDP) by 0.169%. The results made it clear that the relationship between changes in the constant- price NOI growth rate and changes in the (NOGDP) growth rate in the long run is a direct proportional relationship (the elasticity coefficient is positive; as the rise in the (NOI)growth rate will result in a rise in the (NOGDP) growth rate and vice versa. Moreover, the causality test results indicate that there's a two-way causal relationship between the growth rate of the Gross Fixed Capital Formation in Non-oil Sector (NOI) and changes in the growth rate of the constantprice GDP in Non-oil Sector(NOGDP). The results confirmed the the existence of crowding –out where the ratio of current Expenditure reached an average of 72.15% over the period 1974-2014. Capital Expenditure constituted only 28.85% of the total actual Expenditure for the same period. Usually sizable portion of the budget is allocated to this current Expenditure to meet an increasing wages and salaries of the public sector and other payments which asserts the imbalance in relative distribution of current and capital Expenditure which entails that Saudi authorities should take important decisions to increase the ratio of capital Expenditure at the expense of the current one specifically on wages and salaries. The researcher has offered a number of recommendations, among which the most significant ones are: The primary focus of the endeavour to stimulate and accelerate economic growth rates in the KSA should be based on achieving greater capital accumulation (i.e. increasing fixed capital formation), which the study proved to have a higher degree of elasticity with relation to economic growth in the long term, Another important recommendation is the need to direct a greater deal of government Expenditure in the KSA towards higher investment Expenditure, along with rationalizing current Expenditure.
The Impact of Monetary Policy on Economic Growth and Price Stability in Kenya...iosrjce
The government of Kenya’s economic blueprint dubbed ‘Kenya Vision 2030’ acknowledges the
importance of maintaining a stable macro-economic environment. Despite Kenya implementing monetary
policy aimed at achieving stable prices and fostering economic growth, the economy has been reporting low
economic growth and high rates of inflation. These implies there is still a point of disconnect between what
Central bank of Kenya Pursues and the outcome of the objectives. In this study, structural vector autoregresion
(SVAR) model is estimatedto trace the effects of monetary policy shocks on economic growth and prices in
Kenya. Three alternative monetary policy instruments were put into use i.e. broad money supply (M3), interbank
lending rate (ILR) and the real effective exchange rate (REER). The study found evidence that monetary policy
innovations carried out on the quantity-based nominal anchor (M3) has modest effects on economic growth and
prices with a very fast speed of adjustment. Innovations on the price-based nominal anchors (ILR and REER)
have relative and fleeting effects on real GDP. The study recommended that Central Bank of Kenya should
place more emphasis on the use of the quantity-based nominal anchor rather than the price-based nominal
anchor
MONETARY POLICY OF BANGLADESH
Background of the study:
Monetary police in Bangladesh.
Objective of the study.
Literature Review:
Monetary policy of Bangladesh.
Recommendation
Conclusion
Importance of the study.
Objective of monetary policy in Bangladesh.
tools of Monetary policy.
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
Instagram : arguni.hasnain
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Monetary policy is how a central bank acts in its economic environment. A central bank is a national (or, in the case of the European Central Bank, a supranational) institution. Mostly the primary goal is to maintain price stability. Another common goal is to support the economy if it does not inhibit the achievement of price stability to a risky extent. This chapter examines what different costs arise due to inflation (increasing prices) and why it makes sense to keep inflation at a moderate level, to maintain price stability respectively
The Impact of Monetary Policy on Economic Growth and Price Stability in Kenya...iosrjce
The government of Kenya’s economic blueprint dubbed ‘Kenya Vision 2030’ acknowledges the
importance of maintaining a stable macro-economic environment. Despite Kenya implementing monetary
policy aimed at achieving stable prices and fostering economic growth, the economy has been reporting low
economic growth and high rates of inflation. These implies there is still a point of disconnect between what
Central bank of Kenya Pursues and the outcome of the objectives. In this study, structural vector autoregresion
(SVAR) model is estimatedto trace the effects of monetary policy shocks on economic growth and prices in
Kenya. Three alternative monetary policy instruments were put into use i.e. broad money supply (M3), interbank
lending rate (ILR) and the real effective exchange rate (REER). The study found evidence that monetary policy
innovations carried out on the quantity-based nominal anchor (M3) has modest effects on economic growth and
prices with a very fast speed of adjustment. Innovations on the price-based nominal anchors (ILR and REER)
have relative and fleeting effects on real GDP. The study recommended that Central Bank of Kenya should
place more emphasis on the use of the quantity-based nominal anchor rather than the price-based nominal
anchor
MONETARY POLICY OF BANGLADESH
Background of the study:
Monetary police in Bangladesh.
Objective of the study.
Literature Review:
Monetary policy of Bangladesh.
Recommendation
Conclusion
Importance of the study.
Objective of monetary policy in Bangladesh.
tools of Monetary policy.
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
Instagram : arguni.hasnain
Facebook: arguni.hasnain
Monetary policy is how a central bank acts in its economic environment. A central bank is a national (or, in the case of the European Central Bank, a supranational) institution. Mostly the primary goal is to maintain price stability. Another common goal is to support the economy if it does not inhibit the achievement of price stability to a risky extent. This chapter examines what different costs arise due to inflation (increasing prices) and why it makes sense to keep inflation at a moderate level, to maintain price stability respectively
Mr. Nameer Khan is a dynamic young talent in the insurance industry with a diversified experience in various industries of Information Technology, Media, Logistics. Being a new bee in the Insurance sector he has evidently succeeded in shaking up the stigma associated to the insurance sector “dearth of young insurance leaders”.
In his current role at Pak Qatar Takaful Group (Pioneer of Takaful in Pakistan) – Nameer is responsible for providing strategic insights and direction for the company by closely working with the top management to establish long term goals and devise marketing strategies. While being in constant coordination with major Islamic banks in Pakistan, he has successfully pioneered an entirely new concept of Corporate Bancassurance including a range of corporate insurance products – which never existed in Pakistan. These products are aimed at increasing insurance penetration rate and harnessing the key channels of the banks.
Critical to this success lies in his strategic thinking through which he has managed to introduced key analytics and data orientation to the insurance sector – that aims at increasing the efficiency and effectiveness of decisions in the insurance sector of Pakistan.
Pakistan Stock Exchange PSX 2016 - Pakistan Stock exchange is the merger of all three stock exchanges(ISE, LSE, KSE) of Pakistan. Entities which provide "trading" facilities for stock brokers and traders, to trade stocks and other securities.
Capital Market and Economic Growth Nexus: Evidence from Nigeriaiosrjce
IOSR Journal of Business and Management (IOSR-JBM) is a double blind peer reviewed International Journal that provides rapid publication (within a month) of articles in all areas of business and managemant and its applications. The journal welcomes publications of high quality papers on theoretical developments and practical applications inbusiness and management. Original research papers, state-of-the-art reviews, and high quality technical notes are invited for publications
This paper investigates the awareness level and challenges confronting the Bhutanese Stock market and brokers to ascertain its development potential within this emerging economy. The study was carried out using both quantitative and qualitative techniques and is mainly based on primary sources of data where a semi-structured questionnaire was designed to collect data from the public, brokers and officials of Royal Securities Exchange of Bhutan Limited (RSEBL). The findings have revealed that more than half of the public are aware of the existence of the RSEBL and they are not highly knowledgeable about trading on the Stock market or its benefits. The study also found that the respondents are interested in investing in the Stock market but lacked knowledge on investment avenues. Furthermore, the findings have revealed the challenges and limitations which hinder the development of a more robust stock market in Bhutan. The major challenges faced by RESBL and its brokers are lack of participation from public and companies, low frequency of trade and liquidity problem. The study suggests that the public should be educated on the benefits of investing in the stock market as well as on the procedures of investing in stocks. In addition, RSEBL should encourage more companies to be listed in the stock exchange. This study draws awareness to the existence of the Bhutan stock market as a potential investment opportunity. Furthermore, it sheds light on the challenges emerging markets face in establishing a viable and effective exchange.
Transitory and Permanent Effects of Capital Market Development on Capital For...AJHSSR Journal
ABSTRACT: Recent research on the relationship between capital market development and capital formation is
inconsistent.This study investigates the effect of capital market development on capital formation, and
theempiricalmethodutilisedinthisstudy, the Mundlak method,decomposestheeffectsofcapitalmarket development
on capital formation into transitory and permanent effects. This decomposition is important in order to ascertain
whether capital market development is beneficial to short-run or long-run capital formation, which is a key
determinant of a country‟s growth level.The study investigates the capital market development-capital formation
nexus byapplyingaggregate dataset from seven countries within the Sub-Saharan African
regionnamelyGhana,Kenya,IvoryCoast,Mauritius,Nigeria,SouthAfrica,and Zimbabwe over the period from 1980
to 2021. The results indicatethat capital market development has a transitory negative impact on capital
formation,but has a permanent positive impact on capital formation. More importantly, the permanent effect
seems more robust and stronger than the transitory effect. The findings conform to conventional wisdom that
Sub-Saharan African countries with well-developed capital markets experience long-run benefits of increased
capital formation and improved economic development. Based on the research findings, we recommend that
capital market authorities of Sub-Saharan African countries should prioritise policies that will boost productivity,
liquidity, and resilience. The study further recommends that Sub-Saharan African countries must improve their
capital markets‟ infrastructures, and eliminate the tax, legal and regulatory hurdles that impede the development
of their domestic capital markets.
KEYWORDS:Capitalmarketdevelopment,capitalformation,Sub-Saharan Africa, Mundlak Methodology, Panel
data.
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Like developed countries, developing countries have established stock markets in view of achieving their
economic growth. This study sought to investigate the impact of stock exchange market to the economic growth
in Tanzania over a period of 1998 - 1992. A simple regression model using the 1998-2012 annual data sets was
employed. The empirical findings show that the market size has a negative impact on economic growth, which
suggests that the stock market in Tanzania is still infant and thus does not have a significant impact on
economic growth. The findings also show that the market liquidity has a positive impact on the economic
growth, which suggests that that despite the size of the stock market, the market is very active.
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
https://viralsocialtrends.com/vat-registration-outlined-in-uae/
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
Grote partijen zijn al een tijdje onderweg met retail media. Ondertussen worden in dit domein ook de kansen zichtbaar voor andere spelers in de markt. Maar met die kansen ontstaan ook vragen: Zelf retail media worden of erop adverteren? In welke fase van de funnel past het en hoe integreer je het in een mediaplan? Wat is nu precies het verschil met marketplaces en Programmatic ads? In dit half uur beslechten we de dilemma's en krijg je antwoorden op wanneer het voor jou tijd is om de volgende stap te zetten.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
➢ HCMC - Gyeongsangbuk-do Culture and Tourism Festival
➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
1. THE IMPACT OF THE PAKISTAN CAPITAL MARKET ON ECONOMIC GROWTH
Hafiz abdurrasheed, Hailey college of commerce, University of Punjab, Lahore.
Ha.rasheed@hotmail.com
Lecturer
Zainulabideennasir, Hailey college of commerce, University of Punjab, Lahore
Zainali240@hotmai.com
Asimkabir, Hailey college of commerce, University of Punjab, Lahore.
Asim_kabir@yahoo.com
ABSTRACT
This paper seeks to examine the impact of the Pakistan capital market on its economic growth.
This means that the performance of the stock market is an impetus for economic growth and
development. This paper results show that the Pakistan capital market and economic growth are
co-integrated. This implies that a long run relationship exists between capital market and
economic growth in Pakistan. This is a clear indication of the relative positive impact the capital
market plays on the economic growth of the country. The evidence from this study reveals that
the activities in the capital market tend to impact positively on the economy. It is recommended
therefore that the regulatory authority should initiate policies that would encourage more
companies to access the market and also be more proactive in their surveillance role in order to
check sharp practices which undermine market integrity and erode investors’ confidence.
Keywords: Pakistan, impact; stock market performance; capital market; economic growth
INTRODUCTION
No economic activity operates in a vacuum. Market reacts promptly and uncharacteristically to
rumours of war, changes in regulatory environment; political climate seen as a negative factor by
the business (investing) community; and interest rate variation to general performance of the
economy.It is a common trend for stock prices of some quoted companies to rise and fall or fall
and risetwice or thrice within a year. The stock prices of quoted companies on the Nigerian
Stock Exchange(NSE) are affected either positively or negatively by a number of factors
occurring within and without the economic system. According to Corrado and Jordan (2002),
some of the factors influencing stock International Research Journal of Finance and Economics
- Issue 25 (2009) 54price behaviour include company profits; political factors; and economic
performance. Others areinterest rates; inflationary rate; Real Gross Domestic Product; and
shareholder-level taxes.
Investment in stock market is long-term in nature; any development that could affect thestability
of the polity or economy usually has serious impact on the stock prices. In recent times, theNSE
has consistently lost points and the prices of stocks have experienced sharp decline.
Thedownward trend in the market performance was attributed to varying reasons in line with
2. those statedbyCorrado, et al (2002)However, On agoruwa (2006) was of the view that stocks
with history of good performance andfundamental attributes are good to buy at times like this
when their prices are down and more affordable because they are most likely to bounce back
since they have the capacity to absorb the depression in the market.
The injection of new funds through public offer could turn around the fortune of the
marketbecause of the expected liquidity. Hence, it is important for investors to get an
understanding of the working of stock prices of quoted companies.
According to the Central Bank of Nigeria (CBN) Governor, Professor Charles Soludo, investors
should not panic at the present downward trends in the market arena. Of interest to them should
be interest rates, inflation rates, liquidity, and the growth of their investment In well-developed
capital markets, share ownership provides individuals with relatively liquid means of
diversifying investment risk. Stock prices, however have a high degree of volatility due tomarket
fluctuations especially when pressure is being exerted to keep the controlled interest rate closer
to market prices, which are more likely to reflect inflation and scarcity of funds.
The effect of inflation on stock prices are reflected especially where there is a change in
theexpected inflation rate. If the earning streams of a company remain unchanged and inflation
changes from expected, stock prices will experience a decline. Hence, investors who own stock
in such a company will experience negative returns.
The Real Gross Domestic Product (RGDP) which is the sum of the value added in the economy
during a given period or the sum of incomes in the economy during a given period adjusted for
the effect of increasing prices will impact on the liquidity of the capital market; hence its
influence on stock prices.
1. Capital Market Efficiency and Economic Growth: The Case of India
The literature of the paper states the impact of capital market of India on economic growth by
using the time series data on market capitalization. The multiple regression models state that
capital market has a potential impact on the economic growth of the country. As a result there is
high market capitalization and high liquidity. Thus, the large number of domestic and foreign
investors enters into the market with huge investment and trading to allocate economic resources
for the growth of the country. In this course, the growth of a sound dogmatic structure through
improvement of incompetent economic institutions, whether through competition or privatization
of firms to reform the economic system through removing prejudiced taxes or other elements.
2. CAPITAL MARKET DEVELOPMENT AND ECONOMIC GROWTH: THE CASE
OF ROMANIA
It explores the condition of the Romanian capital market which is in a bad position from five
decades. The effect of this position is still today due to which capital market has not reached the
level of development and fails to contribute in the progress of capital market due to the heavy
gap between the European countries and Romania. In 2007 it is showed that there is an upward
trend in the market capitalization due to evolution in the economy of Romania But it is too far
3. from the Central Europe. Regarding the impact of growth rate on capital market, it shows a
positive improvement and efficiency.
3. Effects of Capital Markets Development on Economic Growth of Western Balkan
Countries
Capital Market of a country plays an important role in the mobilization of resources and
encouraging foreign direct investment. Capital market is considered a development indicator for
the rising economies and considered as the supporter of growth rate of the developing countries.
The literature stated that there is a positive correlation between the enterprise and growth of
capital markets and economic growth but experiential studies have diverse outcome.
Numerous studies conducted that if a developing country establishes a capital market it will add
to positive economic growth of a country. But the literature of several studies shows that the
establishment and the development of capital market have not contributed to economic growth
but it has a negative impact rather than positive. The capital markets of Western Balkan countries
are considered small and in early stage as compared to the developed countries. All Western
Balkan countries financial sector is covered mostly by banks so role of capital market is
marginal. Establishment and economic decisions and interference are creating problems for
investors to invest in stock exchanges so stock exchanges are not successful in promoting capital
market.
4. Capital market: An engine for economic growth
Focus on the implications of effective working financial markets. Operating financial markets
has many effective markets. Fundamental it means these are traded in market on blond price. In
United States major banks are recommended to allocate investment portfolio from major
markets. This fair investment portfolio’s whether they are in Bonds or stocks both are beneficial
for domestic and foreign investors. Due to the fluctuations in short term trend, long term trend
help the rising markets to flow on large scale. The efficiency of financial markets also affects the
allocation of capital and it encourages the small investor’s to access the capital market. Finally it
explores the relation between capital market and economic growth.
5. Appraisal of Capital Market Efficiency on Economic Growth in Nigeria
The study explores that there is relation between the capital market efficiency and development
of market capitalization and economic growth, money supply, transaction in stock and rate of
interest. Development of government, market capitalization and rate of interest are important
4. variables for influencing economic growth of Nigeria. If government development stock and
large market capital invested in an un-lucrative sector that does not have the capability of growth
incentive. Interest rate acts as a purpose of what occurring in the capital market. Similarly, total
transaction in stock and money supply are probable growth remind macro-economic variables
that are competent of attractive economic growth in Nigeria. But the study obviously shows that
Nigeria economy has slight absorptive ability, that is financial capital cannot be captivated
effectively to motivate development economic growth. Furthermore, the market is characterized
by illiquidity and extreme government system.
Stock market fluctuations and its effect on gross domestic product is measured by how much
there is foreign investment in a domestic country stock market through international financial
integration(Millani, 2011). Macro economic variables such as unemployment, inflation,
government regulations will be affected of domestic country which will have higher foreign
equites to debt ratio means ( having a large amount of foreign equities in portfolio of that
country) due to which gross domestic product of country will suffer from fluctuatations in
foreign direct investment.(Millani, 2011)
Cross borders wealth affects macro variables in open economies(economies which are free from
trade barriers) due to which these economies are adversely affected by fluctuations in foreign
stock market. impact of stock market on macro economic variable.(Millani, 2011)
Openness to foreign financial markets also affectgdp of domestic country which is estimated as
ratio of foreign equity holdings to total equity investments in country. (Millani, 2011).
Stock prices in economies with higher per capita gdp moves in a relatively un synchronized
manner, while stock prices in economies with lower per capita gdp tend to moves up or down
together. The extent to which stock prices and gdp moves together depends upon firm-level and
market level information capitalized into stock prices. The information content of stock markets:
(Morck, Yeung, & Yu, 2000)
cyclicalmovemetns in oil prices affects negatively on stock markets , as these movements in oil
prices will create inflation and affect the growth of gdp of country. Countries facing these
problems should focus on their fiscal policy rather than monetary policy.(Fills, 2010)
In developed countries bigger electricity consumption bigger the production of goods and
services which will have positive impact on gdp and fix stock market, while it is opposed in
developing countries where to icrease production of goods and services much stress occurs for
electricity due to which valu added services are not nor properly bring into manufacturing
process and poor quality of raw material brings lower production of goods and services which
has negative impact on gdp and fix capital stock market. (Kamimura, Guerra, & Sauer,
2004)(Edwards, 2002)The data is used to investigate the effects of capitalmobility on economic
5. growth. capital mobility indicator is used in thisanalysis in two respects: (1) It allows
forintermediate situations, where a country’s capital account is semi-open; and (2) itis available
for two different periods in time. Results suggesting that an open capital account positively
affects growth only after a country have achieved a certaindegree of economic
development.According to this view, increased capital mobility inflicts many costs and generates
limited benefits to the emerging nations. . Broadly speaking, these results support the view that
while for financially sophisticated countries an open capital account is a boon, atvery low levels
of local financial development a more open capital account may have anegative effect on
performance. In that sense, then, emerging markets are essentially“different” from advanced
nations.
(chkrabotrti, 2003)The model of Mankiw et al. (1992) was extended to establish a relationship
between financial development and economic growth.Results show that capital–output ratio and
rate of growth of human capital have positive effects on real rate of growth of GDP, irrespective
of the indicator of stock market development.. Real wealth, debt burden, real effective exchange
rate and the rate of growth of labor have negative effects.. An increase in the market
capitalization dampens economic growth, whereas turnover has no significant effect, and an
increase in the money market rate of interest has a positive effect on economic growth. The
findings lend no support to the theoretical prediction that the stock market development would
play an important role in enhancing economic growth in India. On the contrary, reform measures
on the market rate of interest that were introduced in the Indian banking system appear to have
promoted economic growth significantly.
(Hussain Abdullah, 2009 January)Fiscal policies have a benign role for economic growth in
the Asian region, namely to provide a stable macro environment for investment. Examines two
different channels through which fiscal policy can affect long run economic growth in Asia. The
first channel is when components and aggregate government expenditure affects the real per
capita GDP and the second channel is when the components and aggregate of other fiscal
variables affects the real per capita GDP.Overall, we concluded that fiscal policy is one of the
most important instruments of government economic policy. To establish the relationship
between fiscal policy and economic growth, the mechanisms through which fiscal policy affects
the above mentioned factors of economic growth have been investigated in the long run. The
significance arises for two reasons. First, they can have opposite impacts on the economy.
Second, there is an outside lag inherent in fiscal policy.
6. Conclusion and Recommendation
However, the findings aligns with Ariyo and Adelegan (2005) and Ewah et al.(2009) who found
that the capital market in Nigeria has the potentials to induce growth but has not contributed
significantly to economic growth of Nigeria due to low market capitalization, small market size,
few listed companies, low volume of transactions, illiquidity among others. Also our result
supports Demirgue-Kunt and Asli (1996) and Harris (1997) who found no hard evidence but
strong positive relationship between stock market and economic growth which is contrary to the
literatures that there is positive relationship between stock market and economic growth.
Based on the discussion of findings of the study, the following recommendations are made
-Encouraging more private limited liability companies and informal sector operators to access
the market for fresh capital.
-Trading impediments such as high transaction costs should be reviewed to encourage more
active trading in stocks.
-SEC should be more proactive in its surveillance role in order to check sharp practices which
undermine the capital market integrity and erode investors’ confidence.
Recommendation for further study: Contrary to our aprioriexpectation, GDP and the volume of
transactions (LVLT) are not only inversely related, but also have a bi-directional causal
relationship. This, in our opinion deserves further investigation.
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8. ASSIGNMENT: THE IMPACT OF THE PAKISTAN CAPITAL MARKET
ON ECONOMIC GROWTH
SUBMIITED TO: SIR HAFIZ ABDUR RASHEED
SUBMITTED BY:
ZAIN-UL-ABIDEEN NASIR ROLL NO:240
ASIM KABIR ROLL NO:230
SECTION: D MORNING
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