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Private capital flows, stock market and economic growth in developed and developing countries: a comparative analysis


Citation

Choong, Chee Keong and Baharumshah, Ahmad Zubaidi and Yusop, Zulkornain and Habibullah, Muzafar Shah (2010) Private capital flows, stock market and economic growth in developed and developing countries: a comparative analysis. Japan and the World Economy, 22 (2). pp. 107-117. ISSN 0922-1425

Abstract

Empirically we investigate how three types of private capital flows could promote economic growth in recipient developed and developing countries. Our focus is on the role of stock markets as a channel through which foreign capital flows could promote growth. The findings reveal that FDI exhibits a positive impact on growth, while both foreign debt and portfolio investment have a negative impact on growth in all sample countries. However, our results indicate that stock markets might be a significant channel or leading institutional factor through which capital flows affect economic growth. The findings provide clear implications that the negative impact of private capital flows can be transformed into a positive one if the stock market development has attained a certain threshold level, regardless of whether it is in developed or developing countries.


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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
DOI Number: https://doi.org/10.1016/j.japwor.2009.07.001
Publisher: Elsevier
Keywords: Private capital flows; Stock market; Economic growth; Panel data analysis
Depositing User: Emelda Mohd Hamid
Date Deposited: 25 Oct 2013 07:13
Last Modified: 18 Oct 2019 04:00
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.1016/j.japwor.2009.07.001
URI: http://psasir.upm.edu.my/id/eprint/16349
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