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Does Supply-Leading Hypothesis Holds in South Africa? Evidence from ARDL Estimation Technique

Author

Listed:
  • Hamisu Sadi ALI
  • Abba N. ZUBAIRU
  • Yakubu J. ABDULLAHI

    (Universiti Putra Malaysia, Malaysia.)

Abstract

Using ARDL bound test procedure the present study investigates whether economic growth influences financial sector development through stock market development in South Africa for the period of 2005 to 2014.The finding shows that growth of the economy enhances financial sector development through stock market medium in South Africa both in short run and long-run phenomenon. The finding confirmed the existence of Joan Robison (1952) supply leading hypothesis in the country investigated. The policy implication is that the authority in this country needs to put additional efforts in policies that will boost the overall performance of the economy considering its positive influence on financial sector development via stock market boost. Effective policies that will enhance the competitiveness of the stock market performance are essential ingredient that will boost the performance of the stock market and hence will have multiplier effect on the overall economy.

Suggested Citation

  • Hamisu Sadi ALI & Abba N. ZUBAIRU & Yakubu J. ABDULLAHI, 2015. "Does Supply-Leading Hypothesis Holds in South Africa? Evidence from ARDL Estimation Technique," Journal of Economics Bibliography, KSP Journals, vol. 2(4), pages 194-200, December.
    • Handle: RePEc:ksp:journ6:v:2:y:2015:i:4:p:194-200
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    Cited by:

    1. Radi M. Adayleh, 2018. "Does Finance – Led Growth Hypothesis Hold in Jordanian Economy? An Empirical Analysis," International Review of Management and Marketing, Econjournals, vol. 8(1), pages 45-54.

    More about this item

    Keywords

    Financial Development; Economic growth; ARDL; Cointegration; South Africa.;
    All these keywords.

    JEL classification:

    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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