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Do Financial Market Openness and Stock Market Returns Drive Economic Growth in GCC Countries? New Investigation from Panel Structural Breaks

Author

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  • Hichem Saidi

    (Department of Economics, College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh 13318, Saudi Arabia)

  • Houssem Rachdi

    (Institut des Hautes Études Commerciales de Carthage Carthage Business School, Tunis 1002, Tunisia)

  • Abdelaziz Hakimi

    (Faculty of Law, Economics, and Management of Jendouba, Jendouba 8100, Tunisia)

  • Khalil Alnabulsi

    (Academy Media, Commerce & Entrepreneurship, NHL Stenden University of Applied Sciences, 8917 DD Leeuwarden, The Netherlands)

Abstract

This paper revisits the effects of financial market openness and stock market returns on economic development in the Gulf Cooperation Council countries over the period 1993–2022. We performed the panel stationarity test advanced that accommodates the presence of multiple structural breaks and exploits the cross-section variations. Empirical results from several panel tests provide strong support for the long-run positive effect of financial market openness on economic growth and a long-run negative association between stock market returns and growth. Findings of the robustness checks reveal that the effect of both financial market openness and stock market returns on economic growth differs across countries.

Suggested Citation

  • Hichem Saidi & Houssem Rachdi & Abdelaziz Hakimi & Khalil Alnabulsi, 2025. "Do Financial Market Openness and Stock Market Returns Drive Economic Growth in GCC Countries? New Investigation from Panel Structural Breaks," IJFS, MDPI, vol. 13(1), pages 1-18, March.
    • Handle: RePEc:gam:jijfss:v:13:y:2025:i:1:p:40-:d:1604840
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    More about this item

    Keywords

    financial market openness; stock market returns; economic development; structural breaks; GCC countries; ; E44; G21; G28; F36;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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