Stocks Market and Economic Growth: A Re-Examination of The Relationship On A Panel of African Countries

International Journal of Economics and Management Studies
© 2020 by SSRG - IJEMS Journal
Volume 7 Issue 9
Year of Publication : 2020
Authors : Simplice Gael Tonmo, Mélissa Grace Woumkep Tchapda, Glwadys Mefenza Pinta, Willi Faustin Djoufouet
How to Cite?

Simplice Gael Tonmo, Mélissa Grace Woumkep Tchapda, Glwadys Mefenza Pinta, Willi Faustin Djoufouet, "Stocks Market and Economic Growth: A Re-Examination of The Relationship On A Panel of African Countries," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 9, pp. 1-14, 2020. Crossref,


The objective of this article is to analyze the impact of the development of African stock markets on the economic growth of countries. To achieve this objective, dynamic panel regression models are applied to certain African stock markets over a period from 1990 to 2016. At the end of the analyzes, the results show that the relationship between the financial market and economic growth varies depending on the indicator used, age. The results also suggest that there would be a significant impact on the market size as measured by market capitalization on economic growth. Economic growth is measured by the growth rate of real Gross Domestic Product per capita. The other two indicators of stock market development, namely the turnover rate in volume and the liquidity of the stock market, have no significant impact on real GDP per capita for the new markets. When old markets are taken into account, there is a significant influence of liquidity and the turnover ratio on economic growth. Also, for the young financial markets, there is also a positive influence of growth on the financial market. Cointegration tests show the existence of a long-term relationship between the financial market and growth for all stock markets regardless of their age. These results generally made it possible to join the line of work, which largely validates the hypothesis of a positive influence of the financial markets on economic growth.


Stock markets, economic growth, panel data, Co-integration.


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