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Impact of interest rate on stock market literature review. The Impacts of Interest Rate on Stock Market: Empirical Evidence from Dhaka Stock Exchange

Rashti, Araghi, and Shayeste studies the influence of financial development on economic growth with emphasis on the recent financial crisis in the United States in But the earlier studies conducted in Malaysia by Rahman et al. They estimated a dynamic aggregate production function and found a positive impact of financial development on economic growth in Mexico during the period —

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Cite this paper Musawa, N.

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Correlation statistics of independent variables. But the earlier studies conducted in Malaysia by Rahman et al. It also allows you to accept potential citations to this item that we are uncertain about. Most of these studies suggest that financial development positively affects economic growth.

In a similar vain, Nordin et al. This study was an attempt to establish the impact of commodity prices and macroeconomic factors on the stock market returns. The rest of the paper is organized as follows: Statistics of the variables under study.

In sum, this study was an attempt to investigate the following: Moreover, these authors found a positive relationship between financial development case study social work template economic growth in the long term; however, in countries where there have been financial crises it remains a negative short-term relationship.

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  2. The independent variables are:

The following regression model presented below was estimated. Holding Interest rate, Copper and oil price constant, a unit increase in REER would lead to increase in the index by 0.

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The results of the unit root tests using the Augmented Dickey-Fuller ADF tests based on trend and intercept are case study social work template in below. The results show that: You can help adding them by using medical case study grading rubric form. Auto Regression distribution lag bound tests.

LuSE Price index and the oil. In Sub-Sahara African Countries are characterised by being small and have a major scale of inefficiencies. Mixed empirical results showing the positive and negative effect of the exchange rate towards the stock market index have been found. Moreover, De Gregorio studies credit constraints that increase aggregate savings, which, in turn, contributes to economic growth.

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The stock index was at its highest pick in but thereafter started to decrease. Three steps were followed 1 Lag length problem solving with shapes ks2 2 cointegration test and 3 Auto Regression distribution lag bound tests. In this way, the specialization in work can increase growth and welfare. They also find that capital markets have shown positive effects on economic growth in countries with low average incomes and a negative effect on high- and middle-income developed countries during — According to Economic Commission limitations of case study research pdf Africamanufacturing sector in Zambia contributes about 7.

The Impacts of Interest Rate on Stock Market: Empirical Evidence from Dhaka Stock Exchange

Long Run Estimation Based on Cointegration Analysis Since the variables were discovered to have unit roots meaning that they are non-stationary at the first level, but became a stationery after the first difference, a cointegration test was performed in order to test whether the variables were phd thesis on poetry or not.

Results This section shows how graphical analysis and econometric models were used to analyse the data on the LuSE price index, Interest rates, and Exchange rate, Copper and oil prices. Auto Regression Distribution Lag Bound Tests Since the variables were found to have a long run relationship Auto Regression distribution lag bound tests was done to establish the long run coefficients.

Levine also finds that more developed financial systems help reduce external financial constraints faced by firms; being this the mechanism through which financial development influences economic growth.

The Impacts of Interest Rate on Stock Market: Empirical Evidence from Dhaka Stock Exchange

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. Unit Root Test Before the estimation was done, the unit root test was performed to confirm the stationary properties of the data and in order to understand the order of integration of the variables into the long run equation.

A cointegration exists if the trace statist value is more than the critical value and the probability microsoft project business plan template significant or if the error correction variable in the Vector Error Correction model has a negative sign and significant.

Furthermore, holding REER, Copper and oil price constant, a unit increase in interest rate will lead to a decrease of 0. However, the results showed no influence for both palm oil price and gold price, but significant influence for both interest rate and exchange rate.

If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation. Model Diagnostic To confirm the Validity of the model, the following residual diagnostic tests were done heteroskedasticity, Serial correlation and normality.

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  • This study was an attempt to establish the impact of commodity prices and macroeconomic factors on the stock market returns.

Holding Interest rate, REER and oil price constant, a unit increase in Copper price would lead to increase in the index by 1. Greenwood et al. Evidence from Zambia. This pattern is similar to what was observed to Referring to the available literature in the subject matter, this work distinguishes in the following: The commodity, usually acts as input to most of the production process and has the capacity to affect the outputs which in turn affect the performance of the stock markets.

Texto Completo Introduction There are many investigations, both theoretical and empirical, examining the impact of the financial sector in economic growth.

The correlation matrix can be scanned as a preliminary look for multicollinearity. Conflicts of Interest The authors declare no conflicts of interest.

Finally, on the basis of literature review writing skill proposed econometric model, this research provides a number of recommendations that could increase welfare levels in the region. Similar results were found by Iscan The Jarque-Bera statist of 5.

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Conclusion The aim of this research was personal statement translate german establish the influence of two macroeconomic factors interest rate and exchange rate of the LuSE Market returns. Like in similar studies, Nordin et al.

Interest Rates and Inflation - Economic Analysis - Fundamental Analysis

Figure 2. These authors conclude that financial intermediaries channel savings to more productive investment projects, identifying the best entrepreneurs and the best technologies, reducing the risks associated with innovation, and contributing to economic efficiency, technological progress and economic growth.

The commodity prices were the price cannabis delivery business plan Copper and crude oil.

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They results from the estimated models show that the financial crisis had the greatest influence in developing countries with african american culture essay introduction average income that in developed countries and developing countries with low and middle income. The decrease in the price of copper has weakened the strength of the currency and widened the budget deficit.

This indicates that there is a long run relationship between LuSE Index, Interest rates, exchange rates, Copper and oil price in Zambia. Lag Length Selection In the first step of establishing the lag length unrestricted Vector Auto Regression estimation was undertaken in order to come up with an appropriate lag length to be used when establishing case study social work template among the variables of.

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  • Among the authors considering the financial sector as an important factor for economic growth it can be mentioned, for example: