Stock Market Development and Economic Growth in SADC Region

The study investigates the relationship between stock market development and economic growth in the Southern African Development Community (SADC) region for the period 1993-2017. The controversy around the stock market development and economic growth nexus is of concern to the SADC which has been experiencing retarded growth while their stock markets are at different levels of development. To establish the relationship among variables of interest, the study used the Auto Regressive Distributive Lag (ARDL) model. The results revealed that there is bi-directional causality both in the short and long run between stock market development and economic growth. The findings further show that trade openness and investment significantly determine stock market development and economic growth in the long run. The result calls for SADC member countries to develop policies that enhance economic growth as well as improving stock market development.