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The impact of stock market performance on economic growth in Malawi
This study investigated the causal relationship between the performance of the Malawi Stock Exchange (MSE) and economic growth in Malawi using quarterly data for the period 2003 to 2017. Stock market performance was measured using four indicators: the all share price index, total stock market capi...
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| Format: | Thesis |
| Language: | English |
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Research of GSB
2019
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| _version_ | 1867613183779274752 |
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| access_status_str | Open Access |
| author | Ng’oma, Diana Kisyombe |
| author2 | Charteris, Ailie |
| author_browse | Charteris, Ailie Ng’oma, Diana Kisyombe |
| author_facet | Charteris, Ailie Ng’oma, Diana Kisyombe |
| author_sort | Ng’oma, Diana Kisyombe |
| collection | Thesis |
| description | This study investigated the causal relationship between the performance of the Malawi Stock
Exchange (MSE) and economic growth in Malawi using quarterly data for the period 2003 to
2017. Stock market performance was measured using four indicators: the all share price index, total stock market capitalisation, stock market liquidity, and the number of shares traded. Economic growth was measured by real Gross Domestic Product (GDP). The Autoregressive Distributed Lag (ARDL) model was used to test for the existence of a long- run co-integrating relationship between the variables, while Granger causality tests, impulse response functions and variance decomposition analyses were employed to examine the short- run dynamics. The co-integration tests found no evidence of a long-run relationship between real GDP and all measures of stock market performance. However, there was evidence of the existence of shortrun relationships, with a positive and significant contemporaneous relationship noted between real GDP and stock market capitalisation and a negative and significant relationship between real GDP and market liquidity. The Granger causality tests revealed the following intertemporal relationships: bidirectional causality between real GDP and stock market liquidity and unidirectional causality from stock market capitalisation to real GDP and changes in the all share price index to real GDP. The impulse response functions and variance decompositions further revealed real GDP reacts highly to a shock in market capitalisation than to other variables and a shock in real GDP causes a higher fluctuation in liquidity than in any other variables. The findings of this study thus show that there is short-term causality between the performance of the MSE and economic growth in Malawi albeit that no long-run relationship exists. In light of these results, specific policy recommendations are provided for various stakeholders so as to enhance economic growth in Malawi. Suggestions for future research are also given. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/29940 |
| institution | University of Cape Town (South Africa) |
| language | English |
| last_indexed | 2026-06-10T12:32:06.010Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2019 |
| publishDateRange | 2019 |
| publishDateSort | 2019 |
| publisher | Research of GSB |
| publisherStr | Research of GSB |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/29940 The impact of stock market performance on economic growth in Malawi Ng’oma, Diana Kisyombe Charteris, Ailie This study investigated the causal relationship between the performance of the Malawi Stock Exchange (MSE) and economic growth in Malawi using quarterly data for the period 2003 to 2017. Stock market performance was measured using four indicators: the all share price index, total stock market capitalisation, stock market liquidity, and the number of shares traded. Economic growth was measured by real Gross Domestic Product (GDP). The Autoregressive Distributed Lag (ARDL) model was used to test for the existence of a long- run co-integrating relationship between the variables, while Granger causality tests, impulse response functions and variance decomposition analyses were employed to examine the short- run dynamics. The co-integration tests found no evidence of a long-run relationship between real GDP and all measures of stock market performance. However, there was evidence of the existence of shortrun relationships, with a positive and significant contemporaneous relationship noted between real GDP and stock market capitalisation and a negative and significant relationship between real GDP and market liquidity. The Granger causality tests revealed the following intertemporal relationships: bidirectional causality between real GDP and stock market liquidity and unidirectional causality from stock market capitalisation to real GDP and changes in the all share price index to real GDP. The impulse response functions and variance decompositions further revealed real GDP reacts highly to a shock in market capitalisation than to other variables and a shock in real GDP causes a higher fluctuation in liquidity than in any other variables. The findings of this study thus show that there is short-term causality between the performance of the MSE and economic growth in Malawi albeit that no long-run relationship exists. In light of these results, specific policy recommendations are provided for various stakeholders so as to enhance economic growth in Malawi. Suggestions for future research are also given. 2019-03-26T12:48:14Z 2019-03-26T12:48:14Z 2018 Thesis MCom http://hdl.handle.net/11427/29940 en application/pdf Research of GSB Faculty of Commerce University Of Cape Town |
| spellingShingle | Ng’oma, Diana Kisyombe The impact of stock market performance on economic growth in Malawi |
| title | The impact of stock market performance on economic growth in Malawi |
| title_full | The impact of stock market performance on economic growth in Malawi |
| title_fullStr | The impact of stock market performance on economic growth in Malawi |
| title_full_unstemmed | The impact of stock market performance on economic growth in Malawi |
| title_short | The impact of stock market performance on economic growth in Malawi |
| title_sort | impact of stock market performance on economic growth in malawi |
| url | http://hdl.handle.net/11427/29940 |
| work_keys_str_mv | AT ngomadianakisyombe theimpactofstockmarketperformanceoneconomicgrowthinmalawi AT ngomadianakisyombe impactofstockmarketperformanceoneconomicgrowthinmalawi |