MACROECONOMIC DETERMINANTS OF STOCK MARKET GROWTH IN GHANA
Abstract
The Efficient Market Hypothesis (EMH) posits that macroeconomic policy actions do not influence stock market development, while the Tobin’s q theory suggests otherwise. This study investigates the impact of macroeconomic policies on the development of the Ghana Stock Exchange (GSE) from 1991 to 2011 using the Autoregressive Distributed Lag (ARDL) technique. The findings reveal that government revenue and exchange rates negatively impact stock market development. Conversely, government expenditure and government borrowing interest rates show no significant influence. The study underscores the importance of effective macroeconomic management to prevent equity investors from relocating their investments in response to macroeconomic policy changes. Therefore, it recommends implementing sound macroeconomic policies to create a stable and conducive environment for stock market growth.
Keywords:
Efficient Market, Hypothesis, Tobin’s q theory, Macroeconomic policy, Stock market development, Ghana Stock ExchangeDownloads
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Copyright (c) 2024 Kwabena Joseph Mensah
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