Research Article Open Access

Stock Market Development and Economic Growth in SADC Region

Sanderson Abel1, Nzwirashe Magomana2, Beatrice Makamba2 and Pierre Le Roux3
  • 1 Midlands State University, Zimbabwe
  • 2 Great Zimbabwe University, Zimbabwe
  • 3 Nelson Mandela, South Africa

Abstract

The study investigates the relationship between stock market development and economic growth in the Southern African Development Community (SADC) region for the period 1993-2017. The controversy around the stock market development and economic growth nexus is of concern to the SADC which has been experiencing retarded growth while their stock markets are at different levels of development. To establish the relationship among variables of interest, the study used the Auto Regressive Distributive Lag (ARDL) model. The results revealed that there is bi-directional causality both in the short and long run between stock market development and economic growth. The findings further show that trade openness and investment significantly determine stock market development and economic growth in the long run. The result calls for SADC member countries to develop policies that enhance economic growth as well as improving stock market development.

Journal of Social Sciences
Volume 17 No. 1, 2021, 89-97

DOI: https://doi.org/10.3844/jssp.2021.89.97

Submitted On: 22 October 2020 Published On: 3 June 2021

How to Cite: Abel, S., Magomana, N., Makamba, B. & Roux, P. L. (2021). Stock Market Development and Economic Growth in SADC Region. Journal of Social Sciences, 17(1), 89-97. https://doi.org/10.3844/jssp.2021.89.97

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Keywords

  • Stock Market
  • Economic Growth
  • SADC
  • ARDL
  • Causality