Impact of Macro Factors on Stock Market Capitalization

Tóm tắt

This article studies the impact of macro factors on the market capitalization of countries around the world. The study uses inflation, interest rates, exchange rates, GDP growth and foreign direct investment as a proxy for macroeconomic factors. Data for all variables are collected for the period 2008-2019. Estimation methods for the balanced panel data are used in this study. The results from the generalized method of moments (GMM) show that inflation, interest rates and foreign direct investment are important factors that significantly affect the capitalization of the stock market. The higher the net foreign direct investment capital, the more support for the development of the stock market. Conversely, higher inflation and interest rates will hinder stock market development in these countries. In addition, the study results confirm that developed stock markets have significantly higher capitalization values than the rest.