The relationship between capital market development and economic growth: the case of Bangladesh

摘要

This paper presents the relationship between the stock market development and economic growth in Bangladesh for a period from 1988 to 2012. We investigated the relationship by using the gross domestic product as indicator for the economic development, market capitalization and the total value of shares traded as indicators for the stock market development. The regression and correlation techniques were used to establish the relationship. The dependent variable was gross domestic product while market capitalization and the total value of shares traded were independent variable of regression. The results show that the market capitalization and the total value of shares traded have positive regression coefficients with the growth domestic product, and also these three variables were found to have positive correlation of at least 90%. From these results obtained, we suggested that there is positive relationship between the stock market development and the economic growth in Bangladesh.