IDEAS home Printed from https://ideas.repec.org/a/ids/ijmpra/v9y2016i2p159-172.html
   My bibliography  Save this article

Does interest rate matter to the Ghanaian stock market?

Author

Listed:
  • Lawrence Adu Asamoah
  • Joseph Akadeagre Agana
  • Daniel Sakyi

Abstract

Stock market and interest rate are two vital factors for financial deepening and economic development of any country. Understanding the effects of interest rate on stock market performance provides important implications for policies towards financial market development. This paper investigates the impact of interest rate on stock market capitalisation in Ghana using monthly data for the period July 2011 to April 2015. The autoregressive distributed lag bounds test approach to cointegration was used for the estimation. The result reveals that, in the long run, interest rate improves stock market capitalisation whilst the opposite is true for the short run. Specifically, the results indicate that, in the long run, long term interest rate has greater impact on stock market capitalisation than short term ones. In the short run, however, long term interest rate has the least impact. The paper concludes that a considerable control of interest rate in Ghana will be of great benefit in the short term for stock market development.

Suggested Citation

  • Lawrence Adu Asamoah & Joseph Akadeagre Agana & Daniel Sakyi, 2016. "Does interest rate matter to the Ghanaian stock market?," International Journal of Management Practice, Inderscience Enterprises Ltd, vol. 9(2), pages 159-172.
    • Handle: RePEc:ids:ijmpra:v:9:y:2016:i:2:p:159-172
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=76744
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Emmanuel Kwasi Mensah & Lawrence Adu Asamoah & Johnson Worlanyo Ahiadorme, 2021. "On the impact of exchange rate uncertainty on private investment in Ghana," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 208-217, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijmpra:v:9:y:2016:i:2:p:159-172. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=91 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.