The Relationship Between Economic Growth and Stock Returns : Evidence From Turkey

Abstract

Financial development is one of the most important determinants of the economic development. Financial developments in Turkey began in the early 1980s and still have continued. During this period, it has survived a severe interaction between financial development and economic growth. In this study, the causality relationship between stock returns and economic growth in Turkey it was analysed over the period 1998Q2-2014Q2. In this context; firstly, Bootstrapped Toda-Yamamoto and Frequency Domain causality tests were applied in order to understand the causality relationship between the two variables. As a result of the Bootstrapped Toda-Yamamoto causality test results, there is no relation of causality between the variables, but according to Frequency Domain causality test stock returns cause the economic growth in short term and economic growth cause stock returns in medium term.

Analysis of the Mediating Effect of Macroeconomic Factors on the Relationship between Dividend Policy and Stock Return in Nairobi Securities Exchange in Kenya

“…Ouma and Muriu (2014) showed that all macroeconomic variables influence the market positively except interest rate and only Kirui et al (2014) revealed contrary results that gross domestic product, inflation, and interest rate do not influence stock return. Results also conform to Senturk et al (2014) and Kirui et al (2014). However, the results are not consistent with the results by Giri and Joshi (2017) and Ouma and Muriu, which found out that economic growth and inflation rate influence stock prices positively…”

“…Empirical studies such as Ouma and Muriu (2014), Giri and Joshi (2017), Senturk et al (2014) and Kullaporn and Lalita (2010) all asserted that macroeconomic factors significantly influence stock return except Kirui et al (2014) who observed that macroeconomic factors insignificantly influence stock return. The reviewed studies such as Garba (2014), Kamini andMalhotra (2013), Al-Masum (2014), Adam et al (2014), Nicol (2013), Farzand et al (2015 and Kang et al (2019) all revealed that dividend policy significantly influences stock return in Nairobi Securities Exchange and that none studies reviewed used macroeconomic factors as mediating variable between dividend policy and stock return in Nairobi Securities Exchange, an investigation of how macroeconomic factors affect the relationship between dividend policy and stock return in Nairobi Securities Exchange became essential.…”

The impact of stock market development on economic growth in Turkey: ARDL analysis

“…However, looking at Turkey's economic past, it becomes clear that the nation has experienced multiple economic crises (Demir, 2019). Although there have been significant correlations between economic growth and financial markets in Turkey since 2002, numerous unfavourable political developments have impacted economic growth and financial stability (Şentürk, Özkan & Akbaş, 2014).…”

Influence of the performance of black economic empowerment shares on the Johannesburg stock exchange top 40

“…On the other hand, the data for Japan shows that CPI and discount rate are insignificant Humpe and MacMillan (2009). state that the results from the US data were expected based on existing theory.Using a different methodology,Şentürk, Özkan and Akbaş (2014) sought to determine causality between economic growth and share returns on the Borsa Istanbul 100 Index and Turkey's Gross Domestic Product (GDP) from quarter 2 in 1998 to quarter 2 in 2014. The Bootstrapped Toda-Yamamoto causality test results showed no causality between the variables; however, the Frequency Domain causality test showed that there was a connection…”