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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

Vichet Sum

University of Maryland Eastern Shore - School of Business and Technology

Date Written: July 26, 2012

Abstract

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

Sum, Vichet, Effects of Business and Consumer Confidence on Stock Market Returns: Cross-Sectional Evidence (July 26, 2012). Economics, Management, and Financial Markets, 9(1), 21-25. March, 2014. Available at SSRN: https://ssrn.com/abstract=2117679 or http://dx.doi.org/10.2139/ssrn.2117679

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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