Capital Market and Economic Growth Nexus: Evidence from Turkey
Coskun, Y.,Seven, U., Ertoğrul, H.M., and Ulussever, T. (2017). Capital market and economic growth nexus: Evidence from Turkey. Central Bank Review, doi.org/10.1016/j.cbrev.2017.02.003
11 Pages Posted: 13 Mar 2017
Date Written: March 13, 2017
This study explores the relations between the development level of capital market sub-components, involving mutual/pension funds, corporate bond, stock and government bond markets, and economic growth over the period of 2006:M1 and 2016:M6 in Turkey. We find that there is a long-run cointegrating relationship between capital market development and economic growth and also a unidirectional causality running from capital market development to economic growth. Using ARDL, Markov Switching Regression and Kalman Filter models, we also find that capital market development has asymmetric effects on economic growth where government bond market development is negatively but the aggregated index of other sub-components is positively associated with economic growth.
Keywords: Stock market, growth, Finance-growth nexus, Borsa istanbul, Turkey
JEL Classification: G00, N20, O16, O47
Suggested Citation: Suggested Citation