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Objective of this paper is to examine the impact of globalisation on stock market development in India using commonly recognised indicators to test this impact. India implemented significant reforms to foster development in capital markets. These reforms were brought in with the objective of improving market efficiency, transparency, and preventing...
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This paper examines the causal relationship between stock market development and economic growth for the West African Monetary Union economy over the last decade or so. By applying the techniques of unit-root tests and the long-run Granger non- causality test proposed by Toda and Yamamoto (1995), the causal relationships between the real GDP growth...
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... Liquidity is the ease and speed at which economic agents can buy and sell securities. The more liquid the stock market, the larger the amount of savings that are channeled through the stock market, also liquidity is key to a successful securities market (Kavita & Rakesh, 2011 ). ...
Abstract: In this paper, we investigated the likelihood that capital market development in the emerging
market like Nigeria is affected by financial openness and visible trade relationship. The paper aimed to
examine how the capital market responds in terms of the market size and the market liquidity proportion
when financial openness and trade integration indicators are endogenously determine by FDI and
Export/Import volume. The main finding is that capital market growth and development is positively
affected by integration of the world economic activities. The result suggest that the regulators most
especially in emerging market, should encourage more liberalization of the financial market as this will
bring about an increase in investors, financial securities, dynamic and quality of financial products and
as well as quality and uniformity in accounting standard.
Key words: Globalization; capital market development; liberalization; financial openness; trade integration: Nigeria
... Regarding the third strand of literature, only a few studies have discussed the relationship between globalization and stock markets returns. For instance, Esqueda, Assefa, and Mollick (2012), Kavita (2011), Ansari (2009) and Karadagli (2012) ...
The study investigates the effect of stock market volatility on economic growth in
Nigeria, accounting for the moderating role globalization (economic, social and political
globalization) from 1981 to 2018. Applying the recently developed unit root with
structural breaks by Lee and Strazicich test, the Bayer–Hancks and Johansen
cointegration tests, the results show that all the variables (real gross domestic product,
stock market returns and globalization index) are integrated of order one, and are
also cointegrated, suggesting evidence of long-run relationship. Further, the results
of the GARCH(1,1) model indicate that the effect of shocks to SMR volatility are very
likely to be permanent than temporary. Regarding the nexus between stock market
return and economic growth, the study reveals a positive, inelastic but statistically
insignificant effect of stock market returns on economic growth in Nigeria. Also,
globalization has a positive, elastic and statistically significant effect on economic
growth in Nigeria. The study therefore, recommends collaborations on policy measures
that would stabilize and reposition the stock market to continue playing its critical
role of galvanizing funds for investment and stimulating economic growth and as
well strengthens globalization related policies to achieve economic growth
... Similarly, Goel and Gupta (2011) investigated the impact of economic globalization on Indian stock market development between 1993 and 2007. The data collected was analyzed with the aid of correlation technique. ...
... Regarding the relationship between integration and liquidity in the Baltic markets it was not find any conclusive evidence in favour of an existing relationship. Goel and Gupta (2011) researched the impact of globalisation on stock market development in India. Empirical results emphasizes that the stock markets in India have experienced exponential growth. ...
The study examined the impact of globalization on the capital market in United States of America, Asia and Europe, using EURO STOXX, S&P500 and NIKKEI 225 stock market indices. In this paper we analyze the impact of globalization on these three major capital marketsapproaching different tests and methods while taking into accountthemethodologies used by the other studies on this topic. We exploit daily data of stock exchange for the period of 2000-August 2019. The empirical findings from Granger causality test, confirmed that the stock markets in America and Europe have a unidirectional causality with the Asian capital market.The influence of the American capital market is also found on the European capital market.
... The direction of the relationship between globalization and capital market development has received little attention from scholars' (See Goel & Gupta, 2011;Jeelani et al., 2013;Pocius et al., 2014). In Nigeria, there is a dearth of literature on the effect of globalization on capital market development. ...
... Capital market globalization is necessitated by the financial need of real sector of the economy which cannot be met domestically due to shortage domestic resources and the opportunities created by global financial markets through rapid technological improvement which supports securities trading and investment among countries (Goel & Gupta, 2011). Thus, globalization of the capital market stimulates industrial development and wealth creation through the inflow of foreign capital by investing in domestic assets by foreign investors, thereby contributing to growth and development. ...
... In conclusion, this graph above shows that the economy has been able to link with other nations of the world through globalization via policies framework and strategy that promote economic integration and interrelation. Goel and Gupta (2011) examined the impact of globalisation on stock market development in India using descriptive and OLS technique. It was indicated that market capitalisation ratio, value traded ratio, and turnover ratio, and volatility ratio had positive and significant stock markets of India. ...
... He used comparative analysis, statistical analysis and efficiency test for his study. (Goel & Gupta, 2011)a researcher here examined the stock market development and the impact of globalization on it by using recognized indicators at the time testing the impact. (Aurangzeb, 2012) this study emphasizes the factor identification which affects the doing of share market in South Asia. ...
Foreign portfolio investment and foreign direct investment are the backbone of any economy as well as contributing to the growth of all developing economies. Herein, it motivated to do the study by investigating the causality between foreign investment and economic growth in India. To find out the exact causation effectively, we have employed a vector error correction model method of causality. The testing time series data period is from 1993 to 2017. Here, in this study, we converted annual gross domestic product and foreign direct investment data into monthly figures. For this we used econometric disaggregation techniques know as linear spline interpolation method for monthly data conversion. ADF unit root test confirms the presence of unit root at level and stationary at first difference. Johansen co-integration test is done after achieving the stationarity and it shows those variables are co-integrated. Whereas Granger causality test results show no-causality exists between (i) FDI and GDP (ii) GDP and FDI (iii) FE and GDP (iv) FD and GDP (v) FE and FDI (vi) FD and FDI (vii) FE and FD and uni-directional causality exist between GDP and FE (ii) GDP and FD (ii) FDI and FE (iv) FDI and FD (v) FD and FE. The results advocates that FDI, FE, FD boost the economic growth of India.
... The direction of the relationship between globalization and capital market development has received little attention from scholars' (See Goel & Gupta, 2011;Jeelani et al., 2013;Pocius et al., 2014). In Nigeria, there is a dearth of literature on the effect of globalization on capital market development. ...
... Capital market globalization is necessitated by the financial need of real sector of the economy which cannot be met domestically due to shortage domestic resources and the opportunities created by global financial markets through rapid technological improvement which supports securities trading and investment among countries (Goel & Gupta, 2011). Thus, globalization of the capital market stimulates industrial development and wealth creation through the inflow of foreign capital by investing in domestic assets by foreign investors, thereby contributing to growth and development. ...
... In conclusion, this graph above shows that the economy has been able to link with other nations of the world through globalization via policies framework and strategy that promote economic integration and interrelation. Goel and Gupta (2011) examined the impact of globalisation on stock market development in India using descriptive and OLS technique. It was indicated that market capitalisation ratio, value traded ratio, and turnover ratio, and volatility ratio had positive and significant stock markets of India. ...
... In functional form, we capture the performance of the Stock Market by the contribution of Stock market year-end capitalization to the national output (GDP). Kavita and Rakesh (2011), in their work on "Impact of globalization on stock market development in India" used changes in market capitalization as a ratio to GDP, to measure size; an independent variable that explains or determines stock market development in India. This is estimated as the ratio of Year-on-Year changes in the level of Market Capitalization to GDP. ...
This study examines the impact of financial deepening on the performance of the Nigerian capital market over the period of 1981 to 2012. The method of analysis entailed an evaluation of the stochastic characteristics of each time series variable adopted in the study by testing their stationarity using the Im Pesaran Shin W-Stat Test. The multiple regression technique was employed to ascertain the different levels of impact on the subject matter. The findings were reinforced by the presence of long-term equilibrium relationship as evidenced by the cointegrating equation of the VECM. The model ascertained that financial deepening variables actually positively impacted on the performance of the Nigerian stock market. The study revealed Narrow Money Diversification (involving size of commercial banks’ demand deposit) and the growth of Savings significantly impacted the performance of the Nigerian stock market during the period. Though, other measures of financial deepening represented by Income output growth and Financial Development (involving credit to private sector) exhibited positive coefficients but were not significant in explaining the improved performance of the country's capital market. The study recommends that government and other stake holders in the economy should take measures to further improve the financial deepening in the economy as a way to enhance the performance of the capital market. The focus of policy targets should be specific in measures to enhance bank deposits and saving. The expansion of credit to the private sector of the economy should be managed by to improve returns to investors in the stock market. Further monetization of the economy and improved financial deepening could be achieved by through financial inclusion programmes involving the extension of financial services and outlets to deficient locations and people in the country.
... Researchers (Karolyi, 1992& Harvey, 2001) have also examined time-varying linkages between different international markets and they explored that when a global factor dominates domestic market, it tends to correlate with the global market. Longin & Solnik (1995); Goel & Gupta (2011) suggested that when domestic market tends to go with international market, the correlation is found to be very high. Faff & Mittoo (2003) tried to explore the origin of market integration, that is, whether it is associated with geographical proximity or industry proximity. ...
... This measure has also been applied in measuring volatility in the Indian stock Indian stock market. An increase in standard deviation would denote an increase in volatility [28]. ...
