Capital Market Efficiency and Economic Growth: The Scenario of India

Author(s): Aakash Shinde and Dr. James Thomas

Abstract:

This study uses time series data on market capitalization, total market turnover, and the stock price index for the period spanning from the first quarter of 1991 to the first quarter of 2010 to assess the effect of capital market efficiency on economic growth in India. The use of the multiple regression model demonstrates that India's capital market has the ability to support the nation's economic expansion. High market capitalisation and comparatively high market liquidity are to blame for this. Hence, market organisations and laws should be designed in such a way that a big number of local and international investors enter the market with massive listings, investments, and trading, ensuring the exact goal of efficient allocation of economic resources for the country's long-term progress.

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Pages: 24-29     |    3 View     |    0 Download