What Drives Stock Market Development in the Middle East and Central Asia--Institutions, Remittances, or Natural Resources?

23 Pages Posted: 23 Aug 2007

See all articles by Andreas Billmeier

Andreas Billmeier

International Monetary Fund (IMF) - Middle East and Central Asia Department

Isabella Massa

Ca' Foscari University - Venice

Date Written: July 2007

Abstract

In this paper, we assess the macroeconomic determinants of stock market capitalization in a panel of 17 countries in the Middle East and Central Asia, including both hydrocarbon-rich countries and economies without sizeable natural resource wealth. In addition to traditional variables, we include an institutional variable and remittances among the regressors. We find that (i) both institutions and remittances have a positive and significant impact on market capitalization; and (ii) both regressors matter, especially in countries without significant hydrocarbon sectors; whereas (iii) in resource-rich countries, stock market capitalization is mainly driven by the oil price.

Keywords: Working Paper, Stock markets, Middle East and Central Asia, Natural resources, Oil prices, Workers remittances, Economic models

Suggested Citation

Billmeier, Andreas and Massa, Isabella, What Drives Stock Market Development in the Middle East and Central Asia--Institutions, Remittances, or Natural Resources? (July 2007). IMF Working Papers, Vol. , pp. 1-21, 2007. Available at SSRN: https://ssrn.com/abstract=1007906

Andreas Billmeier (Contact Author)

International Monetary Fund (IMF) - Middle East and Central Asia Department ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Isabella Massa

Ca' Foscari University - Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

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