tailieunhanh - Determinants of stock arket development in southeast asian countries

Determinants of stock arket development in southeast asian countries. This p ap er examines the determinants of stock market develop ment in Southeast Asian countries. Our findings show that income growth rate, saving rate, financial develop ment, stock market liquidity, and macroeconomic stability are the main determinants of market cap italization. | Journal of Economics and Development Vol. 44, , April 2012, pp. 101-112 Determinants of Stock Market ISSN 1859 0020 Development in Southeast Asian Countries Phan Dinh Nguyen Hochiminh City University of Technology and University of Adelaide, Australia Email: nguyenpdinh@ Vo Thi Ha Hanh Deutsche Bank Hochiminh City Branch Email: nguyenpdinh@ Abstract This paper examines the determinants of stock market development in Southeast Asian countries. Our findings show that income growth rate, saving rate, financial development, stock market liquidity, and macroeconomic stability are the main determinants of market capitalization. Meanwhile macroeconomic stability measured by the change in inflation and the financial crisis have had a negative effect on market capitalization, other variales have a potivive effect. Keywords: Stock market development, ASEAN stock markets, panel data analysis Journal of Economics and Development 101 Vol. 14, , April 2012 1. Introduction Since the 1990s, there have been numerous debates as to whether stock market development has led to economic growth. The question is an important one in order to clear policy implications for countries that have financial sectors that are comparatively underdeveloped. As Levine and Zervos (1998) argued that a well-established stock market not only can mobilize capital and diversify risks between market agents but it is also able to provide different types of financial services than banking sector to stimulate economic growth. The role of financial markets has been more and more affirmed as one of the main indicators of economic stability, in which stock market indexes provides indications on the economic health of a country. However, the concern on whether developing countries themselves reap any benefits from their stock market development with the boom over the past decades still exists. New theoretical work shows that stock market development may give a big boost to the .