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: 302

Full Length Research Paper

Macroeconomic variables and stock market performance of emerging countries

Winful Christian Ernest
  • Winful Christian Ernest
  • Accountancy Department, Accra Polytechnic, Ghana.
  • Google Scholar
Sarpong David Jnr
  • Sarpong David Jnr
  • Accountancy Department, Accra Polytechnic, Ghana.
  • Google Scholar
Sarfo Adjei Kofi
  • Sarfo Adjei Kofi
  • Accountancy Department, Accra Polytechnic, Ghana.
  • Google Scholar

  •  Received: 06 January 2016
  •  Accepted: 18 May 2016
  •  Published: 31 August 2016


This article seeks to fill the gap of severe data limitations on the link between macroeconomic variables and stock market performance. A panel data of 41 emerging countries for the period 1996 to 2011 was used to estimate the results. The model used by Sangmi and Mubasher (2013) was adopted and modified to determine the effect of macroeconomic variables on stock market capitalization. The four techniques to investigate the effects were robust ordinary least squares (OLS), FGLS, dynamic ordinary least squares (DOLS) and then Newey-West. It was discovered that depreciation in exchange rate in dollars and reduction in consumer price index affects stock market development negatively, while increase in money supply does influence stock market positively. The findings highlight the significance of macroeconomic factors such as consumer price index, exchange rate, money supply and GDP in explaining the stock market performance in emerging stock economies.


Key words: Stock Market Capitalization, Money Supply, Consumer Price Index, GDP and Stock Market