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Stock Market Dynamics and Economic Growth: Empirical Insights from G7 Nations

In: Navigating Economic Uncertainty - Vol. 2

Author

Listed:
  • Sihana Hoxha Shala

    (South East European University)

  • Ardita Bytyqi

    (South East European University)

  • Shenaj Haxhimustafa

    (South East European University)

Abstract

The primary objective of this paper is to comprehensively examine the intricate relationship between economic growth and stock market capitalization. By employing empirical and theoretical frameworks, this study sheds light on the dynamics at play within this nexus. Focusing specifically on the G7 countries, this research scrutinizes data spanning two decades (2000–2020), mainly focusing on gross domestic product and market capitalization. Through meticulous analysis, the aim is to ascertain the extent to which stock markets act as catalysts for economic advancement or, conversely, whether economic growth propels stock market expansion within these nations. Methodologically, this study employs a regression model that is tested utilizing the STATA software. Drawing upon insights from the theoretical literature, which posits a fundamental linkage between stock market performance, financial development, and economic growth, this paper aims to validate these theoretical assertions through empirical analysis. The anticipated findings will contribute to the theoretical discourse and provide practical insights for policymakers and investors alike. Specifically, the results are expected to affirm that robust and efficient stock markets are intricately intertwined with enhanced economic growth, aligning with theoretical expectations and empirical observations.

Suggested Citation

  • Sihana Hoxha Shala & Ardita Bytyqi & Shenaj Haxhimustafa, 2025. "Stock Market Dynamics and Economic Growth: Empirical Insights from G7 Nations," Springer Proceedings in Business and Economics, in: Hyrije Abazi-Alili & Abdylmenaf Bexheti & Veland Ramadani & Carmem Leal & Carlos Peixeira Marques (ed.), Navigating Economic Uncertainty - Vol. 2, pages 133-145, Springer.
    • Handle: RePEc:spr:prbchp:978-3-031-73510-3_9
    DOI: 10.1007/978-3-031-73510-3_9
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