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

See all articles by Yener Coskun

Yener Coskun

Capital Markets Board of Turkey

Ünal Seven

Government of the Republic of Turkey - Research Department; IMT Institute for Advanced Studies

Hasan Murat Ertugrul

Government of the Republic of Turkey - Undersecretariat of the Treasury

Talat Ulussever

King Fahd University of Petroleum & Minerals (KFUPM) - Department of Finance & Economics (FINEC)

Date Written: March 13, 2017

Abstract

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

Coskun, Yener and Seven, Ünal and Ertugrul, Hasan Murat and Ulussever, Talat, Capital Market and Economic Growth Nexus: Evidence from Turkey (March 13, 2017). 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, Available at SSRN: https://ssrn.com/abstract=2932006

Yener Coskun (Contact Author)

Capital Markets Board of Turkey ( email )

Eskisehir Yolu 8. km No:156
Ankara, 06530
Turkey

HOME PAGE: http://ankara.academia.edu/yenercoskun

Ünal Seven

Government of the Republic of Turkey - Research Department ( email )

Istiklal Cad. 10 Ulus
06100 Ankara
Turkey

IMT Institute for Advanced Studies ( email )

Complesso San Micheletto
Lucca, 55100
Italy

Hasan Murat Ertugrul

Government of the Republic of Turkey - Undersecretariat of the Treasury ( email )

TR-06510 Ankara
Turkey

Talat Ulussever

King Fahd University of Petroleum & Minerals (KFUPM) - Department of Finance & Economics (FINEC) ( email )

United States

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