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Impact of Stock Market on Economic Growth Evidence: Dar-es Salaam Stock Exchange - Tanzania

Received: 19 September 2016     Accepted: 5 October 2016     Published: 17 November 2016
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Abstract

The objective of the study was to establish relationship between the stock market measures and economic growth in Tanzania. In order to achieve the objective, we need to examine the impact of stock market capitalization, total value of share traded and turnover on Tanzanian economy based on the time series data from 2000 - 2011. The unit root test and wnteestq (Portmanteau) tests were carried out. The findings suggest that Dar-es Salam Stock Exchange (DSE) has no effect on economic growth of Tanzania. We recommended that Tanzania government should establish financial policies, in order to encourage companies develop financial stock market culture, and enhance to push companies to initiate Initial Public Offering (IPO) instead of bank loans when money is needed to increase their investment.

Published in Journal of Finance and Accounting (Volume 4, Issue 6)
DOI 10.11648/j.jfa.20160406.12
Page(s) 321-327
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

Market Capitalization Ratio, GDP Growth, Total Value of Shares Traded Ratio, Turnover Ratio

References
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[3] Antonios, A. (2010) Stock Market and Economic Growth: An Empirical Analysis for Germany. Business and Economics Journal, Volume 2010: BEJ-1.
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[5] Brambila Macias, J., and I. Massa (2009) ‘The global financial crisis and sub-Saharan Africa. The effects of slowing private capital inflows on growth’, ODI Working Paper 304. London: Overseas Development Institute.
[6] Charles, Y., & Charles, A,. (2007). IMF Working Paper No. WP/07/209.
[7] Chen, Lee and Wong, (2004), Is Rate of Stock Returns a Leading Indicator of Output Growth? In Case of Four East Asian Countries.
[8] Deb S. G. and Mukherjee J., (2008). “Does Stock Market Development Cause Economic Growth? A Time Series Analysis for Indian Economy”, International Research Journal of Finance and Economics, Issue 21, pp. 142-149.
[9] Ejibola, E. (2009), “Stock Market Development and Economic Growth: Evidence from Seven Sub-Sahara African Countries”, Journal of Economics & Business, Vol.61 (2), 162-171.
[10] El-Wassal, A. Kamal, (2005), “Understanding the Growth in Emerging Stock Markets,” Journal of Emerging Market Finance, Vol. 4 (3), pp. 227–261.
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[13] Kamuzora, Adam J, F (2013). Research Methods for Business and Social Studies, Morogoro: Mzumbe Book Project Tanzania.
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[17] Nazir, M.s, Nawaz M. M. and Javed U. (2010) Relationship between economic growth and stock market development. African Journal of Business Management Vol. 4(16), pp. 3473-3479.
[18] Nowbutsing B. M. and Odit M. P., (2009). “Stock Market Development and Economic Growth: The Case of Mauritius”, International Business & Economics Research Journal, Vol. 8, No.2, pp. 77-88.
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Cite This Article
  • APA Style

    Ali Othman Abbas, Yu Xin Pei, Zhang Rui. (2016). Impact of Stock Market on Economic Growth Evidence: Dar-es Salaam Stock Exchange - Tanzania. Journal of Finance and Accounting, 4(6), 321-327. https://doi.org/10.11648/j.jfa.20160406.12

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    ACS Style

    Ali Othman Abbas; Yu Xin Pei; Zhang Rui. Impact of Stock Market on Economic Growth Evidence: Dar-es Salaam Stock Exchange - Tanzania. J. Finance Account. 2016, 4(6), 321-327. doi: 10.11648/j.jfa.20160406.12

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    AMA Style

    Ali Othman Abbas, Yu Xin Pei, Zhang Rui. Impact of Stock Market on Economic Growth Evidence: Dar-es Salaam Stock Exchange - Tanzania. J Finance Account. 2016;4(6):321-327. doi: 10.11648/j.jfa.20160406.12

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  • @article{10.11648/j.jfa.20160406.12,
      author = {Ali Othman Abbas and Yu Xin Pei and Zhang Rui},
      title = {Impact of Stock Market on Economic Growth Evidence: Dar-es Salaam Stock Exchange - Tanzania},
      journal = {Journal of Finance and Accounting},
      volume = {4},
      number = {6},
      pages = {321-327},
      doi = {10.11648/j.jfa.20160406.12},
      url = {https://doi.org/10.11648/j.jfa.20160406.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20160406.12},
      abstract = {The objective of the study was to establish relationship between the stock market measures and economic growth in Tanzania. In order to achieve the objective, we need to examine the impact of stock market capitalization, total value of share traded and turnover on Tanzanian economy based on the time series data from 2000 - 2011. The unit root test and wnteestq (Portmanteau) tests were carried out. The findings suggest that Dar-es Salam Stock Exchange (DSE) has no effect on economic growth of Tanzania. We recommended that Tanzania government should establish financial policies, in order to encourage companies develop financial stock market culture, and enhance to push companies to initiate Initial Public Offering (IPO) instead of bank loans when money is needed to increase their investment.},
     year = {2016}
    }
    

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  • TY  - JOUR
    T1  - Impact of Stock Market on Economic Growth Evidence: Dar-es Salaam Stock Exchange - Tanzania
    AU  - Ali Othman Abbas
    AU  - Yu Xin Pei
    AU  - Zhang Rui
    Y1  - 2016/11/17
    PY  - 2016
    N1  - https://doi.org/10.11648/j.jfa.20160406.12
    DO  - 10.11648/j.jfa.20160406.12
    T2  - Journal of Finance and Accounting
    JF  - Journal of Finance and Accounting
    JO  - Journal of Finance and Accounting
    SP  - 321
    EP  - 327
    PB  - Science Publishing Group
    SN  - 2330-7323
    UR  - https://doi.org/10.11648/j.jfa.20160406.12
    AB  - The objective of the study was to establish relationship between the stock market measures and economic growth in Tanzania. In order to achieve the objective, we need to examine the impact of stock market capitalization, total value of share traded and turnover on Tanzanian economy based on the time series data from 2000 - 2011. The unit root test and wnteestq (Portmanteau) tests were carried out. The findings suggest that Dar-es Salam Stock Exchange (DSE) has no effect on economic growth of Tanzania. We recommended that Tanzania government should establish financial policies, in order to encourage companies develop financial stock market culture, and enhance to push companies to initiate Initial Public Offering (IPO) instead of bank loans when money is needed to increase their investment.
    VL  - 4
    IS  - 6
    ER  - 

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Author Information
  • School of Accountancy, Jiangxi University of Finance and Economics, Nanchang, China

  • School of Accountancy, Jiangxi University of Finance and Economics, Nanchang, China

  • School of Accountancy, Jiangxi University of Finance and Economics, Nanchang, China

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