Abstract

http://ssrn.com/abstract=2436194
 


 



Economic Growth, Stock Market Performance, Economic Growth Uncertainty and Foreign Participation in Local Equity Market: A Cross-Sectional Examination of 63 Countries


Vichet Sum


University of Maryland Eastern Shore - School of Business and Technology

May 12, 2014


Abstract:     
This study investigates the joint explanation and impact of economic growth, equity market performance and economic growth uncertainty on foreign participation (using net inflows from equity securities held by foreign investors as a proxy) in local equity market. Based on the analysis of cross-sectional data of all 63 countries including developed, emerging and frontier markets, the results show equity market return, economic growth, economic growth uncertainty have no impact on foreign participation in local equity market. However, by looking at the cross-sectional data of only emerging markets, the results indicate economic growth, equity market return and economic growth uncertainty jointly explain about 67.13% of the variation in foreign participation in local equity market across 17 emerging markets. Higher growth and higher stock market return are associated with greater foreign participation in local equity market in emerging markets.

Number of Pages in PDF File: 19

Keywords: economic growth, GDP growth rate, GDP growth uncertainty, stock market performance, foreign stock market investment

JEL Classification: N10, G10, G11, G15

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Date posted: May 13, 2014 ; Last revised: May 29, 2014

Suggested Citation

Sum, Vichet, Economic Growth, Stock Market Performance, Economic Growth Uncertainty and Foreign Participation in Local Equity Market: A Cross-Sectional Examination of 63 Countries (May 12, 2014). Available at SSRN: http://ssrn.com/abstract=2436194 or http://dx.doi.org/10.2139/ssrn.2436194

Contact Information

Vichet Sum (Contact Author)
University of Maryland Eastern Shore - School of Business and Technology ( email )
2105 Kiah Hall
Princess Anne, MD 21853
United States
410-651-6531 (Phone)
410-651-6529 (Fax)
HOME PAGE: http://www.umes.edu/bma/Sum.html
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