Stock Market Liberalization, Stock Market Performance and Economic Growth in Kenya
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Date
2014
Authors
Kinuthia, Isaac Kimunio
Etyang, Martin N.
Journal Title
Journal ISSN
Volume Title
Publisher
Canadian Center of Science and Education
Abstract
The study empirically examined whether stock market liberalization improves the functioning of domestic stock
market and accelerates economic growth in Kenya. The study also assessed the kind of relationship between
liberalization, stock market performance and economic growth in Kenya. Liberalization was assessed by stock
market capitalization while turnover was used to asses stock market performance. The study used quarterly time
series data collected through secondary sources and covered a period of 22 years from January, 1991 to December,
2012. The study utilized econometric techniques of Vector autoregressive and Granger Causality Tests to
investigate the relationships. The results displayed a one way causality that runs from stock market development to
economic growth. The results also show that stock market liberalization indirectly impacts on economic growth
through investment. The study found that stock market liberalization has a significant positive impact on the
economic growth in Kenya
Description
DOI: 10.5539/ijef.v6n4p196
Keywords
liberalization, market capitalization, turnover, economic growth
Citation
International Journal of Economics and Finance; Vol. 6, No. 4; 2014