Journal of
Economics and International Finance

  • Abbreviation: J. Econ. Int. Finance
  • Language: English
  • ISSN: 2006-9812
  • DOI: 10.5897/JEIF
  • Start Year: 2009
  • Published Articles: 359

Full Length Research Paper

Assessment of financial system and economic growth: An empirical evidence from Ghana’s stock market

Samuel Kofi Asiamah
  • Samuel Kofi Asiamah
  • Department of Applied Finance and Policy Management, University of Education, Winneba, Ghana.
  • Google Scholar

  •  Received: 31 October 2022
  •  Accepted: 31 January 2023
  •  Published: 28 February 2023


The importance of a country’s financial system to its economic well-being cannot be underestimated. This paper seeks to investigate whether causation exists between Ghana’s financial system and economic growth. Ghana’s financial system was measured using the efficiency, depth, and stability of the stock market, while economic growth was measured as the Gross Domestic Growth (GDP) per capita growth. The measurement variables were purposively sampled from 2008 to 2020, spanning thirteen years of time series data. The granger causality approach was employed to test the financial system’s and economic growth’s causation. In analysis the data, the study employed the Augmented Fuller Dickey (ADF) and Phillip Perron (PP) to test the stationarity of the series, the Jerque Bera Variable to test the normality of the data and the VAR and Johansen cointegration to test the order of integration among the variables. The statistical test revealed that the variables were not cointegrated at level; there was a unit root in the series. There was no long or short run relationship among the variables. Furthermore, the regressors’ depth, efficiency, and stability of the stock market as proxies for the financial system of Ghana do not cause economic growth. It is recommended that regulatory bodies should pursue policies that would improve the effectiveness, efficiency, depth, and stability of other aspects of the country’s financial system and focus less on the stock market due to the discovered relationship between the stock market and economic growth.


Keywords: Financial system, economic growth, stock market.