The Impact of Macedonian Stock Exchange Performance on Economic Growth in Republic of Macedonia

Spaseska, Tatjana and Vitanova, Gordana and Sotiroski, Kosta and Odzaklieska, Dragica and Risteska, Aneta and Risteska, Fanka (2016) The Impact of Macedonian Stock Exchange Performance on Economic Growth in Republic of Macedonia. International Balkan and Near Eastern Social Sciences Conference Series. ISSN 978-9989-695-56-8

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Abstract

Capital market plays an important role in the economic growth. Capital markets bring numerous efficiencies to the economy in terms of better allocation of resources, efficient process of capital raising, improvement in governance and transparency, productive utilization of savings, development of the corporate sector and growth of companies, expansion of investor base and enlarge the pace and diversity of resource flows etc. These features of the capital markets and functioning of the stock exchange are considered vital for developing an efficient financial system that could benefit the real economy. One intermediary in the market that operates as a rallying point for the overall activities is the stock exchange. This paper examines the relationship between stock market performances and economic growth in Macedonian context. The purpose of this study is to analyze and evaluate the performance of the Macedonian Stock Exchange and identify the extent to which it affects the Macedonian economy. In this research, we are going to carry out an analysis of the connection between the performances on the Macedonian stock exchange and the economic growth. Here, as parameters of the Macedonian stock exchange performances, we shall take the market capitalization of listed companies, the average value of MBI10 (MBI10 shares index value), volume of trading on the stock exchange and the number of listed companies. On the other hand, the annual growth rates of gross domestic product are taken as indicators of the economic growth. Correlative and regressive analysis of time series was used to examine the relationship between stock market performance and economic growth. The study finds that 95.12% variability of the values of Gross domestic product is explained by the link with the performances of the Macedonian stock exchange, while 4.88% of the variability is a result of other factors which are not comprised by the regression model. Regression model indicates that there is a very strong link between gross domestic product (GDP) and the performances of the Macedonian stock exchange: market capitalization of the listed companies (MK), average value of (MBI10), volume of trading on the Macedonian stock exchange (VOT) and number of listed companies (NLK) (Multiple R=0.975).

Item Type: Article
Subjects: Scientific Fields (Frascati) > Social Sciences > Economics and Business
Divisions: Faculty of Economics
Depositing User: Mr Dimitar Risteski
Date Deposited: 19 Nov 2019 10:22
Last Modified: 05 Mar 2020 09:42
URI: http://eprints.uklo.edu.mk/id/eprint/2050

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