Stock Market and Economic Growth in Malaysia: Casuality Test

Asian Social Science, Vol. 4, No. 4, pp. 86-92, April 2008

7 Pages Posted: 5 May 2009

See all articles by Wai-Mun Har

Wai-Mun Har

Universiti Tunku Abdul Rahman (UTAR)

Chun-Siong Ee

affiliation not provided to SSRN

Chai-Thing Tan

Universiti Tunku Abdul Rahman (UTAR)

Date Written: May 3, 2009

Abstract

Stock market has been associated with economic growth through its role as source for new private capital. On the other hand, economic growth may be the catalyst for stock market growth. Thus, the purpose of this paper was to explore causal relationships between stock market and the economy using formal tests of causality developed by C. J. Granger and yearly Malaysia data for the period 1977-2006. Results show that stock market Granger-caused economic activity with no reverse causality observed. The longest significant lag length observed from the results was two years.

Keywords: Growth, Stock market, Stock market and growth relationship, Malaysia’s economy

JEL Classification: G00

Suggested Citation

Har, Wai-Mun and Ee, Chun-Siong and Tan, Chai-Thing, Stock Market and Economic Growth in Malaysia: Casuality Test (May 3, 2009). Asian Social Science, Vol. 4, No. 4, pp. 86-92, April 2008, Available at SSRN: https://ssrn.com/abstract=1398266

Wai-Mun Har (Contact Author)

Universiti Tunku Abdul Rahman (UTAR) ( email )

Sungai Long Campus Lot PT 21144
Bandar Sg. Long, Cheras, Selangor D.E.,
Bandar Sungai Long, 43000
Malaysia

Chun-Siong Ee

affiliation not provided to SSRN ( email )

Chai-Thing Tan

Universiti Tunku Abdul Rahman (UTAR) ( email )

Sungai Long Campus Lot PT 21144
Bandar Sg. Long, Cheras, Selangor D.E.,
Bandar Sungai Long, 43000
Malaysia

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