Effects of Business and Consumer Confidence on Stock Market Returns: Cross-Sectional Evidence
Economics, Management, and Financial Markets, 9(1), 21-25. March, 2014
7 Pages Posted: 26 Jul 2012 Last revised: 3 Mar 2014
Date Written: July 26, 2012
This paper examines the effects of business and consumer confidence on stock market returns. Based on the analysis of monthly data from thirty-one countries, the results show that business and consumer confidence has a positive effect on stock market returns. The findings reveal that change in consumer confidence has a stronger effect on stock market returns across countries than the change in business confidence. The results are useful for stock market valuation, investment and risk management.
Keywords: business confidence, consumer confidence, stock market returns
JEL Classification: G10, G12, G14
Suggested Citation: Suggested Citation