Relating stock market performance to macroeconomic variables in developing economies

Chinwe Okoyeuzu, Ebere Ume Kalu, Emmanuel Onah, Anthony Igwe, Wilfred Ukpere

Research output: Contribution to journalArticlepeer-review


Given the uniqueness of the stock market in Sub-Saharan Africa (SSA) and the fact that empirical conclusions have always been drawn based on more advanced stock markets, it becomes necessary to investigate the nexus between stock market performance and selected macroeconomic variables in SSA countries. With a purpose of unveiling the relationship between stock market performance and selected macroeconomic variables, the uniqueness and relevance of the paper stems from the fact that it looks at developing stock markets in a developing macroeconomic environment, and it covers the period from 1997 to 2018. The Panel-Autoregressive Distributed Lag model supported by a good number of pre-and post-estimation techniques was used as the estimation technique and the datasets which are of secondary nature were drawn from the World Development Indicators. The study’s findings revealed that stock market indicators responded relatively to macroeconomic indicators in the long run and were adjusted to the shocks and dynamics of the changing macroeconomic environment. The findings confirmed that the nexus between broad money supply and the dependent variables for the two models was a mixed one. The findings arising from this study shown by the short run adjustment of stock market performance to changes in macroeconomic variables is important for governments to interpret and make policies on contemporaneous effects and forecast of the dynamism of the stock market and macroeconomic linkage.

Original languageEnglish
Pages (from-to)40-48
Number of pages9
JournalEconomics of Development
Issue number3
Publication statusPublished - 2022


  • economic development
  • efficient market hypothesis
  • inflation rate
  • interest rate
  • market capitalization

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)
  • Economics and Econometrics


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