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What Drives Stock Market Development in Arab Countries?

Author

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  • Chiad, Faycal
  • Hadj Sahraoui, Hamoudi

Abstract

Arab stock exchanges have witnessed tremendous growth in recent decades, and the number of listed companies and the size of stock market capitalization have increased. In the light of this remarkable growth, this study aims to find out what are the most important determinants and economic factors affecting this development during the period 2006– 2017. By employing panel data models, we find that trade openness; market liquidity, money supply and economic growth have positive impacts on stock market development, whereas the global financial crisis has negative impact. Based on these results, measures should be taken to improve market liquidity, control of money supply, and maintain a balanced economic growth rate to promote the development of Arab stock exchanges. Policy recommendations are provided based on these findings.

Suggested Citation

  • Chiad, Faycal & Hadj Sahraoui, Hamoudi, 2021. "What Drives Stock Market Development in Arab Countries?," MPRA Paper 112035, University Library of Munich, Germany, revised 2021.
  • Handle: RePEc:pra:mprapa:112035
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    References listed on IDEAS

    as
    1. Braun, Matias, 2004. "Trade Liberalization and the Politics of Financial Development," Santa Cruz Department of Economics, Working Paper Series qt70v7f9ff, Department of Economics, UC Santa Cruz.
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    3. Valeriano F. García & Lin Liu, 1999. "Macroeconomic Determinants of Stock Market Development," Journal of Applied Economics, Universidad del CEMA, vol. 2, pages 29-59, May.
    4. Valeriano F. Garcia & Lin Liu, 1999. "Macroeconomic Determinants of Stock Market Development," Journal of Applied Economics, Taylor & Francis Journals, vol. 2(1), pages 29-59, May.
    5. Beck, Nathaniel & Katz, Jonathan N., 1995. "What To Do (and Not to Do) with Time-Series Cross-Section Data," American Political Science Review, Cambridge University Press, vol. 89(3), pages 634-647, September.
    6. Charles Amo Yartey, 2008. "The Determinants of Stock Market Development in Emerging Economies: Is South Africa Different?," IMF Working Papers 2008/032, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Macroeconomic variables; stock markets development; Arab countries; panel data analysis;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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